Correlation Between MAGIC SOFTWARE and Sony Group
Can any of the company-specific risk be diversified away by investing in both MAGIC SOFTWARE and Sony Group 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 Sony Group 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 Sony Group Corp, you can compare the effects of market volatilities on MAGIC SOFTWARE and Sony Group 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 Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGIC SOFTWARE and Sony Group.
Diversification Opportunities for MAGIC SOFTWARE and Sony Group
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MAGIC and Sony is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding MAGIC SOFTWARE ENTR and Sony Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group Corp 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 Sony Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group Corp has no effect on the direction of MAGIC SOFTWARE i.e., MAGIC SOFTWARE and Sony Group go up and down completely randomly.
Pair Corralation between MAGIC SOFTWARE and Sony Group
Assuming the 90 days trading horizon MAGIC SOFTWARE is expected to generate 58.45 times less return on investment than Sony Group. But when comparing it to its historical volatility, MAGIC SOFTWARE ENTR is 2.8 times less risky than Sony Group. It trades about 0.0 of its potential returns per unit of risk. Sony Group Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 366.00 in Sony Group Corp on October 27, 2024 and sell it today you would earn a total of 1,633 from holding Sony Group Corp or generate 446.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAGIC SOFTWARE ENTR vs. Sony Group Corp
Performance |
| Timeline |
| MAGIC SOFTWARE ENTR |
| Sony Group Corp |
MAGIC SOFTWARE and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAGIC SOFTWARE and Sony Group
The main advantage of trading using opposite MAGIC SOFTWARE and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGIC SOFTWARE position performs unexpectedly, Sony Group 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 Sony Group will offset losses from the drop in Sony Group's long position.| MAGIC SOFTWARE vs. CANON MARKETING JP | MAGIC SOFTWARE vs. FARM 51 GROUP | MAGIC SOFTWARE vs. TRADELINK ELECTRON | MAGIC SOFTWARE vs. North American Construction |
| Sony Group vs. MAGNUM MINING EXP | Sony Group vs. DISTRICT METALS | Sony Group vs. PLAYSTUDIOS A DL 0001 | Sony Group vs. ePlay Digital |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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