Correlation Between Magic Software and ASURE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Magic Software and ASURE SOFTWARE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Magic Software and ASURE SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magic Software Enterprises and ASURE SOFTWARE, you can compare the effects of market volatilities on Magic Software and ASURE SOFTWARE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Magic Software with a short position of ASURE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and ASURE SOFTWARE.
Diversification Opportunities for Magic Software and ASURE SOFTWARE
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magic and ASURE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE and Magic Software is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Magic Software Enterprises are associated (or correlated) with ASURE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASURE SOFTWARE has no effect on the direction of Magic Software i.e., Magic Software and ASURE SOFTWARE go up and down completely randomly.
Pair Corralation between Magic Software and ASURE SOFTWARE
Assuming the 90 days horizon Magic Software Enterprises is expected to under-perform the ASURE SOFTWARE. But the stock apears to be less risky and, when comparing its historical volatility, Magic Software Enterprises is 1.08 times less risky than ASURE SOFTWARE. The stock trades about 0.0 of its potential returns per unit of risk. The ASURE SOFTWARE is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 990.00 in ASURE SOFTWARE on September 1, 2024 and sell it today you would lose (70.00) from holding ASURE SOFTWARE or give up 7.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. ASURE SOFTWARE
Performance |
| Timeline |
| Magic Software Enter |
| ASURE SOFTWARE |
Magic Software and ASURE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and ASURE SOFTWARE
The main advantage of trading using opposite Magic Software and ASURE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, ASURE SOFTWARE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ASURE SOFTWARE will offset losses from the drop in ASURE SOFTWARE's long position.| Magic Software vs. Synopsys | Magic Software vs. Superior Plus Corp | Magic Software vs. NMI Holdings | Magic Software vs. Origin Agritech |
| ASURE SOFTWARE vs. PennyMac Mortgage Investment | ASURE SOFTWARE vs. Autohome ADR | ASURE SOFTWARE vs. bet at home AG | ASURE SOFTWARE vs. NURAN WIRELESS INC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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