Correlation Between MAGIC SOFTWARE and Ares Management
Can any of the company-specific risk be diversified away by investing in both MAGIC SOFTWARE and Ares Management 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 Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAGIC SOFTWARE ENTR and Ares Management Corp, you can compare the effects of market volatilities on MAGIC SOFTWARE and Ares Management 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 Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGIC SOFTWARE and Ares Management.
Diversification Opportunities for MAGIC SOFTWARE and Ares Management
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MAGIC and Ares is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding MAGIC SOFTWARE ENTR and Ares Management Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management Corp 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 ENTR are associated (or correlated) with Ares Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Management Corp has no effect on the direction of MAGIC SOFTWARE i.e., MAGIC SOFTWARE and Ares Management go up and down completely randomly.
Pair Corralation between MAGIC SOFTWARE and Ares Management
Assuming the 90 days trading horizon MAGIC SOFTWARE is expected to generate 4.38 times less return on investment than Ares Management. In addition to that, MAGIC SOFTWARE is 1.51 times more volatile than Ares Management Corp. It trades about 0.02 of its total potential returns per unit of risk. Ares Management Corp is currently generating about 0.11 per unit of volatility. If you would invest 6,495 in Ares Management Corp on December 1, 2024 and sell it today you would earn a total of 9,631 from holding Ares Management Corp or generate 148.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAGIC SOFTWARE ENTR vs. Ares Management Corp
Performance |
| Timeline |
| MAGIC SOFTWARE ENTR |
| Ares Management Corp |
MAGIC SOFTWARE and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAGIC SOFTWARE and Ares Management
The main advantage of trading using opposite MAGIC SOFTWARE and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGIC SOFTWARE position performs unexpectedly, Ares Management 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 Ares Management will offset losses from the drop in Ares Management's long position.| MAGIC SOFTWARE vs. CITY OFFICE REIT | MAGIC SOFTWARE vs. FONIX MOBILE PLC | MAGIC SOFTWARE vs. HAVERTY FURNITURE A | MAGIC SOFTWARE vs. Haverty Furniture Companies |
| Ares Management vs. The Hanover Insurance | Ares Management vs. United Overseas Insurance | Ares Management vs. Ping An Insurance | Ares Management vs. Goosehead Insurance |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world |