Correlation Between MAGIC SOFTWARE and Papa Johns
Can any of the company-specific risk be diversified away by investing in both MAGIC SOFTWARE and Papa Johns 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 Papa Johns 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 Papa Johns International, you can compare the effects of market volatilities on MAGIC SOFTWARE and Papa Johns 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 Papa Johns. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGIC SOFTWARE and Papa Johns.
Diversification Opportunities for MAGIC SOFTWARE and Papa Johns
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MAGIC and Papa is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding MAGIC SOFTWARE ENTR and Papa Johns International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papa Johns International 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 Papa Johns. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papa Johns International has no effect on the direction of MAGIC SOFTWARE i.e., MAGIC SOFTWARE and Papa Johns go up and down completely randomly.
Pair Corralation between MAGIC SOFTWARE and Papa Johns
Assuming the 90 days trading horizon MAGIC SOFTWARE ENTR is expected to generate 0.89 times more return on investment than Papa Johns. However, MAGIC SOFTWARE ENTR is 1.12 times less risky than Papa Johns. It trades about 0.09 of its potential returns per unit of risk. Papa Johns International is currently generating about 0.04 per unit of risk. If you would invest 943.00 in MAGIC SOFTWARE ENTR on September 1, 2024 and sell it today you would earn a total of 257.00 from holding MAGIC SOFTWARE ENTR or generate 27.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
MAGIC SOFTWARE ENTR vs. Papa Johns International
Performance |
| Timeline |
| MAGIC SOFTWARE ENTR |
| Papa Johns International |
MAGIC SOFTWARE and Papa Johns Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAGIC SOFTWARE and Papa Johns
The main advantage of trading using opposite MAGIC SOFTWARE and Papa Johns positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGIC SOFTWARE position performs unexpectedly, Papa Johns 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 Papa Johns will offset losses from the drop in Papa Johns' long position.| MAGIC SOFTWARE vs. SIVERS SEMICONDUCTORS AB | MAGIC SOFTWARE vs. Darden Restaurants | MAGIC SOFTWARE vs. Reliance Steel Aluminum | MAGIC SOFTWARE vs. Q2M Managementberatung AG |
| Papa Johns vs. Consolidated Communications Holdings | Papa Johns vs. HEMISPHERE EGY | Papa Johns vs. China Communications Services | Papa Johns vs. KRISPY KREME DL 01 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |