Correlation Between MAGIC SOFTWARE and Infrastrutture Wireless
Can any of the company-specific risk be diversified away by investing in both MAGIC SOFTWARE and Infrastrutture Wireless 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 Infrastrutture Wireless 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 Infrastrutture Wireless Italiane, you can compare the effects of market volatilities on MAGIC SOFTWARE and Infrastrutture Wireless 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 Infrastrutture Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGIC SOFTWARE and Infrastrutture Wireless.
Diversification Opportunities for MAGIC SOFTWARE and Infrastrutture Wireless
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAGIC and Infrastrutture is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding MAGIC SOFTWARE ENTR and Infrastrutture Wireless Italia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastrutture Wireless 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 Infrastrutture Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastrutture Wireless has no effect on the direction of MAGIC SOFTWARE i.e., MAGIC SOFTWARE and Infrastrutture Wireless go up and down completely randomly.
Pair Corralation between MAGIC SOFTWARE and Infrastrutture Wireless
Assuming the 90 days trading horizon MAGIC SOFTWARE ENTR is expected to generate 4.32 times more return on investment than Infrastrutture Wireless. However, MAGIC SOFTWARE is 4.32 times more volatile than Infrastrutture Wireless Italiane. It trades about 0.19 of its potential returns per unit of risk. Infrastrutture Wireless Italiane is currently generating about 0.26 per unit of risk. If you would invest 1,040 in MAGIC SOFTWARE ENTR on September 14, 2024 and sell it today you would earn a total of 140.00 from holding MAGIC SOFTWARE ENTR or generate 13.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAGIC SOFTWARE ENTR vs. Infrastrutture Wireless Italia
Performance |
| Timeline |
| MAGIC SOFTWARE ENTR |
| Infrastrutture Wireless |
MAGIC SOFTWARE and Infrastrutture Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAGIC SOFTWARE and Infrastrutture Wireless
The main advantage of trading using opposite MAGIC SOFTWARE and Infrastrutture Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGIC SOFTWARE position performs unexpectedly, Infrastrutture Wireless 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 Infrastrutture Wireless will offset losses from the drop in Infrastrutture Wireless' long position.| MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc |
| Infrastrutture Wireless vs. URBAN OUTFITTERS | Infrastrutture Wireless vs. MAGIC SOFTWARE ENTR | Infrastrutture Wireless vs. UPDATE SOFTWARE | Infrastrutture Wireless vs. Alfa Financial Software |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |