Correlation Between BANK MANDIRI and Magic Software
Can any of the company-specific risk be diversified away by investing in both BANK MANDIRI 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 BANK MANDIRI and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK MANDIRI and Magic Software Enterprises, you can compare the effects of market volatilities on BANK MANDIRI 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 BANK MANDIRI with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK MANDIRI and Magic Software.
Diversification Opportunities for BANK MANDIRI and Magic Software
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Magic is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding BANK MANDIRI 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 BANK MANDIRI 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 BANK MANDIRI 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 BANK MANDIRI i.e., BANK MANDIRI and Magic Software go up and down completely randomly.
Pair Corralation between BANK MANDIRI and Magic Software
Assuming the 90 days trading horizon BANK MANDIRI is expected to generate 1.89 times less return on investment than Magic Software. But when comparing it to its historical volatility, BANK MANDIRI is 1.32 times less risky than Magic Software. It trades about 0.03 of its potential returns per unit of risk. Magic Software Enterprises is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 918.00 in Magic Software Enterprises on September 1, 2024 and sell it today you would earn a total of 182.00 from holding Magic Software Enterprises or generate 19.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
BANK MANDIRI vs. Magic Software Enterprises
Performance |
| Timeline |
| BANK MANDIRI |
| Magic Software Enter |
BANK MANDIRI and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK MANDIRI and Magic Software
The main advantage of trading using opposite BANK MANDIRI and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK MANDIRI 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.| BANK MANDIRI vs. DEVRY EDUCATION GRP | BANK MANDIRI vs. Pebblebrook Hotel Trust | BANK MANDIRI vs. Xinhua Winshare Publishing | BANK MANDIRI vs. Laureate Education |
| Magic Software vs. Synopsys | Magic Software vs. Superior Plus Corp | Magic Software vs. NMI Holdings | Magic Software vs. Origin Agritech |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |