Correlation Between MAGIC SOFTWARE and Axway Software
Can any of the company-specific risk be diversified away by investing in both MAGIC SOFTWARE and Axway 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 Axway Software 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 Axway Software SA, you can compare the effects of market volatilities on MAGIC SOFTWARE and Axway 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 Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGIC SOFTWARE and Axway Software.
Diversification Opportunities for MAGIC SOFTWARE and Axway Software
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MAGIC and Axway is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding MAGIC SOFTWARE ENTR and Axway Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software SA 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 Axway Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axway Software SA has no effect on the direction of MAGIC SOFTWARE i.e., MAGIC SOFTWARE and Axway Software go up and down completely randomly.
Pair Corralation between MAGIC SOFTWARE and Axway Software
Assuming the 90 days trading horizon MAGIC SOFTWARE ENTR is expected to generate 1.66 times more return on investment than Axway Software. However, MAGIC SOFTWARE is 1.66 times more volatile than Axway Software SA. It trades about 0.12 of its potential returns per unit of risk. Axway Software SA is currently generating about -0.16 per unit of risk. If you would invest 1,116 in MAGIC SOFTWARE ENTR on October 17, 2024 and sell it today you would earn a total of 44.00 from holding MAGIC SOFTWARE ENTR or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAGIC SOFTWARE ENTR vs. Axway Software SA
Performance |
| Timeline |
| MAGIC SOFTWARE ENTR |
| Axway Software SA |
MAGIC SOFTWARE and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAGIC SOFTWARE and Axway Software
The main advantage of trading using opposite MAGIC SOFTWARE and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGIC SOFTWARE position performs unexpectedly, Axway 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 Axway Software will offset losses from the drop in Axway Software's long position.| MAGIC SOFTWARE vs. BANKINTER ADR 2007 | MAGIC SOFTWARE vs. JSC Halyk bank | MAGIC SOFTWARE vs. National Beverage Corp | MAGIC SOFTWARE vs. THAI BEVERAGE |
| Axway Software vs. InterContinental Hotels Group | Axway Software vs. HYATT HOTELS A | Axway Software vs. Wyndham Hotels Resorts | Axway Software vs. MELIA HOTELS |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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