Correlation Between MAGIC SOFTWARE and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both MAGIC SOFTWARE and SEALED AIR 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 SEALED AIR 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 SEALED AIR , you can compare the effects of market volatilities on MAGIC SOFTWARE and SEALED AIR 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 SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGIC SOFTWARE and SEALED AIR.
Diversification Opportunities for MAGIC SOFTWARE and SEALED AIR
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAGIC and SEALED is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding MAGIC SOFTWARE ENTR and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR 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 SEALED AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALED AIR has no effect on the direction of MAGIC SOFTWARE i.e., MAGIC SOFTWARE and SEALED AIR go up and down completely randomly.
Pair Corralation between MAGIC SOFTWARE and SEALED AIR
Assuming the 90 days trading horizon MAGIC SOFTWARE ENTR is expected to generate 1.6 times more return on investment than SEALED AIR. However, MAGIC SOFTWARE is 1.6 times more volatile than SEALED AIR . It trades about 0.09 of its potential returns per unit of risk. SEALED AIR is currently generating about 0.0 per unit of risk. If you would invest 925.00 in MAGIC SOFTWARE ENTR on November 28, 2024 and sell it today you would earn a total of 235.00 from holding MAGIC SOFTWARE ENTR or generate 25.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAGIC SOFTWARE ENTR vs. SEALED AIR
Performance |
| Timeline |
| MAGIC SOFTWARE ENTR |
| SEALED AIR |
MAGIC SOFTWARE and SEALED AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAGIC SOFTWARE and SEALED AIR
The main advantage of trading using opposite MAGIC SOFTWARE and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGIC SOFTWARE position performs unexpectedly, SEALED AIR 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 SEALED AIR will offset losses from the drop in SEALED AIR's long position.| MAGIC SOFTWARE vs. Fast Retailing Co | MAGIC SOFTWARE vs. RETAIL FOOD GROUP | MAGIC SOFTWARE vs. FAST RETAIL ADR | MAGIC SOFTWARE vs. JD SPORTS FASH |
| SEALED AIR vs. Salesforce | SEALED AIR vs. YATRA ONLINE DL 0001 | SEALED AIR vs. CARSALESCOM | SEALED AIR vs. GUILD ESPORTS PLC |
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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