Correlation Between Magic Software and XTANT MEDICAL
Can any of the company-specific risk be diversified away by investing in both Magic Software and XTANT MEDICAL 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 XTANT MEDICAL 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 XTANT MEDICAL HLDGS, you can compare the effects of market volatilities on Magic Software and XTANT MEDICAL 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 XTANT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and XTANT MEDICAL.
Diversification Opportunities for Magic Software and XTANT MEDICAL
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magic and XTANT is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and XTANT MEDICAL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTANT MEDICAL HLDGS 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 XTANT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTANT MEDICAL HLDGS has no effect on the direction of Magic Software i.e., Magic Software and XTANT MEDICAL go up and down completely randomly.
Pair Corralation between Magic Software and XTANT MEDICAL
Assuming the 90 days horizon Magic Software is expected to generate 1.21 times less return on investment than XTANT MEDICAL. But when comparing it to its historical volatility, Magic Software Enterprises is 1.7 times less risky than XTANT MEDICAL. It trades about 0.01 of its potential returns per unit of risk. XTANT MEDICAL HLDGS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 58.00 in XTANT MEDICAL HLDGS on September 28, 2024 and sell it today you would lose (24.00) from holding XTANT MEDICAL HLDGS or give up 41.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. XTANT MEDICAL HLDGS
Performance |
| Timeline |
| Magic Software Enter |
| XTANT MEDICAL HLDGS |
Magic Software and XTANT MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and XTANT MEDICAL
The main advantage of trading using opposite Magic Software and XTANT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, XTANT MEDICAL 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 XTANT MEDICAL will offset losses from the drop in XTANT MEDICAL's long position.| Magic Software vs. GALENA MINING LTD | Magic Software vs. MCEWEN MINING INC | Magic Software vs. WIZZ AIR HLDGUNSPADR4 | Magic Software vs. GRIFFIN MINING LTD |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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