Correlation Between MAGIC SOFTWARE and COMBA TELECOM
Can any of the company-specific risk be diversified away by investing in both MAGIC SOFTWARE and COMBA TELECOM 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 COMBA TELECOM 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 COMBA TELECOM SYST, you can compare the effects of market volatilities on MAGIC SOFTWARE and COMBA TELECOM 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 COMBA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGIC SOFTWARE and COMBA TELECOM.
Diversification Opportunities for MAGIC SOFTWARE and COMBA TELECOM
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between MAGIC and COMBA is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding MAGIC SOFTWARE ENTR and COMBA TELECOM SYST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMBA TELECOM SYST 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 COMBA TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMBA TELECOM SYST has no effect on the direction of MAGIC SOFTWARE i.e., MAGIC SOFTWARE and COMBA TELECOM go up and down completely randomly.
Pair Corralation between MAGIC SOFTWARE and COMBA TELECOM
Assuming the 90 days trading horizon MAGIC SOFTWARE ENTR is expected to generate 1.32 times more return on investment than COMBA TELECOM. However, MAGIC SOFTWARE is 1.32 times more volatile than COMBA TELECOM SYST. It trades about 0.0 of its potential returns per unit of risk. COMBA TELECOM SYST is currently generating about -0.22 per unit of risk. If you would invest 1,040 in MAGIC SOFTWARE ENTR on August 30, 2024 and sell it today you would lose (10.00) from holding MAGIC SOFTWARE ENTR or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAGIC SOFTWARE ENTR vs. COMBA TELECOM SYST
Performance |
| Timeline |
| MAGIC SOFTWARE ENTR |
| COMBA TELECOM SYST |
MAGIC SOFTWARE and COMBA TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAGIC SOFTWARE and COMBA TELECOM
The main advantage of trading using opposite MAGIC SOFTWARE and COMBA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGIC SOFTWARE position performs unexpectedly, COMBA TELECOM 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 COMBA TELECOM will offset losses from the drop in COMBA TELECOM's long position.| MAGIC SOFTWARE vs. Transport International Holdings | MAGIC SOFTWARE vs. Coor Service Management | MAGIC SOFTWARE vs. Cleanaway Waste Management | MAGIC SOFTWARE vs. Transportadora de Gas |
| COMBA TELECOM vs. ALTAIR RES INC | COMBA TELECOM vs. SYSTEMAIR AB | COMBA TELECOM vs. Luckin Coffee | COMBA TELECOM vs. JAPAN TOBACCO UNSPADR12 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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