Correlation Between PT Bank and Magic Software
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Mandiri and Magic Software Enterprises, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Magic Software.
Diversification Opportunities for PT Bank and Magic Software
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PQ9 and Magic is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PT 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 PT Bank 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 PT 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 PT Bank i.e., PT Bank and Magic Software go up and down completely randomly.
Pair Corralation between PT Bank and Magic Software
Assuming the 90 days horizon PT Bank Mandiri is expected to under-perform the Magic Software. In addition to that, PT Bank is 1.7 times more volatile than Magic Software Enterprises. It trades about -0.19 of its total potential returns per unit of risk. Magic Software Enterprises is currently generating about 0.0 per unit of volatility. If you would invest 1,200 in Magic Software Enterprises on November 27, 2024 and sell it today you would lose (10.00) from holding Magic Software Enterprises or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Mandiri vs. Magic Software Enterprises
Performance |
| Timeline |
| PT Bank Mandiri |
| Magic Software Enter |
PT Bank and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Magic Software
The main advantage of trading using opposite PT Bank and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.| PT Bank vs. Genertec Universal Medical | PT Bank vs. Geratherm Medical AG | PT Bank vs. CREO MEDICAL GRP | PT Bank vs. Chengdu PUTIAN Telecommunications |
| Magic Software vs. COMPUTERSHARE | Magic Software vs. WILLIS LEASE FIN | Magic Software vs. Computershare Limited | Magic Software vs. Rocket Internet SE |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |