Correlation Between Meitav Trade and Magic Software
Can any of the company-specific risk be diversified away by investing in both Meitav Trade and Magic Software 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 Meitav Trade and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meitav Trade Inv and Magic Software Enterprises, you can compare the effects of market volatilities on Meitav Trade and Magic Software 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 Meitav Trade with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meitav Trade and Magic Software.
Diversification Opportunities for Meitav Trade and Magic Software
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meitav and Magic is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Meitav Trade Inv and Magic Software Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magic Software Enter and Meitav Trade 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 Meitav Trade Inv are associated (or correlated) with Magic Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magic Software Enter has no effect on the direction of Meitav Trade i.e., Meitav Trade and Magic Software go up and down completely randomly.
Pair Corralation between Meitav Trade and Magic Software
Assuming the 90 days trading horizon Meitav Trade Inv is expected to generate 0.54 times more return on investment than Magic Software. However, Meitav Trade Inv is 1.87 times less risky than Magic Software. It trades about 0.89 of its potential returns per unit of risk. Magic Software Enterprises is currently generating about -0.06 per unit of risk. If you would invest 928.00 in Meitav Trade Inv on August 29, 2024 and sell it today you would earn a total of 223.00 from holding Meitav Trade Inv or generate 24.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meitav Trade Inv vs. Magic Software Enterprises
Performance |
| Timeline |
| Meitav Trade Inv |
| Magic Software Enter |
Meitav Trade and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meitav Trade and Magic Software
The main advantage of trading using opposite Meitav Trade and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meitav Trade position performs unexpectedly, Magic Software 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 Magic Software will offset losses from the drop in Magic Software's long position.| Meitav Trade vs. Nice | Meitav Trade vs. The Gold Bond | Meitav Trade vs. Bank Leumi Le Israel | Meitav Trade vs. ICL Israel Chemicals |
| Magic Software vs. Sapiens International | Magic Software vs. AudioCodes | Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |