Correlation Between Plaza Centers and Magic Software
Can any of the company-specific risk be diversified away by investing in both Plaza Centers 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 Plaza Centers and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plaza Centers NV and Magic Software Enterprises, you can compare the effects of market volatilities on Plaza Centers 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 Plaza Centers with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Centers and Magic Software.
Diversification Opportunities for Plaza Centers and Magic Software
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plaza and Magic is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Centers NV 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 Plaza Centers 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 Plaza Centers NV 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 Plaza Centers i.e., Plaza Centers and Magic Software go up and down completely randomly.
Pair Corralation between Plaza Centers and Magic Software
Assuming the 90 days trading horizon Plaza Centers NV is expected to generate 9.46 times more return on investment than Magic Software. However, Plaza Centers is 9.46 times more volatile than Magic Software Enterprises. It trades about 0.11 of its potential returns per unit of risk. Magic Software Enterprises is currently generating about 0.08 per unit of risk. If you would invest 20,000 in Plaza Centers NV on September 1, 2024 and sell it today you would earn a total of 220.00 from holding Plaza Centers NV or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plaza Centers NV vs. Magic Software Enterprises
Performance |
| Timeline |
| Plaza Centers NV |
| Magic Software Enter |
Plaza Centers and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Centers and Magic Software
The main advantage of trading using opposite Plaza Centers and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Centers 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.| Plaza Centers vs. Magic Software Enterprises | Plaza Centers vs. Skyline Investments | Plaza Centers vs. Discount Investment Corp | Plaza Centers vs. Iargento Hi Tech |
| Magic Software vs. Sapiens International | Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor | Magic Software vs. Nova |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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