Correlation Between MAGIC SOFTWARE and Greenland Hong
Can any of the company-specific risk be diversified away by investing in both MAGIC SOFTWARE and Greenland Hong 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 Greenland Hong 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 Greenland Hong Kong, you can compare the effects of market volatilities on MAGIC SOFTWARE and Greenland Hong 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 Greenland Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGIC SOFTWARE and Greenland Hong.
Diversification Opportunities for MAGIC SOFTWARE and Greenland Hong
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between MAGIC and Greenland is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding MAGIC SOFTWARE ENTR and Greenland Hong Kong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenland Hong Kong 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 Greenland Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenland Hong Kong has no effect on the direction of MAGIC SOFTWARE i.e., MAGIC SOFTWARE and Greenland Hong go up and down completely randomly.
Pair Corralation between MAGIC SOFTWARE and Greenland Hong
Assuming the 90 days trading horizon MAGIC SOFTWARE is expected to generate 18.56 times less return on investment than Greenland Hong. But when comparing it to its historical volatility, MAGIC SOFTWARE ENTR is 6.66 times less risky than Greenland Hong. It trades about 0.02 of its potential returns per unit of risk. Greenland Hong Kong is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Greenland Hong Kong on September 12, 2024 and sell it today you would earn a total of 0.05 from holding Greenland Hong Kong or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAGIC SOFTWARE ENTR vs. Greenland Hong Kong
Performance |
| Timeline |
| MAGIC SOFTWARE ENTR |
| Greenland Hong Kong |
MAGIC SOFTWARE and Greenland Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAGIC SOFTWARE and Greenland Hong
The main advantage of trading using opposite MAGIC SOFTWARE and Greenland Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGIC SOFTWARE position performs unexpectedly, Greenland Hong 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 Greenland Hong will offset losses from the drop in Greenland Hong's long position.| MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc |
| Greenland Hong vs. MAGIC SOFTWARE ENTR | Greenland Hong vs. CompuGroup Medical SE | Greenland Hong vs. Take Two Interactive Software | Greenland Hong vs. Clearside Biomedical |
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 Stocks Directory module to find actively traded stocks across global markets.
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