Correlation Between Greenland Hong and MAGIC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Greenland Hong 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 Greenland Hong and MAGIC SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenland Hong Kong and MAGIC SOFTWARE ENTR, you can compare the effects of market volatilities on Greenland Hong 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 Greenland Hong with a short position of MAGIC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenland Hong and MAGIC SOFTWARE.
Diversification Opportunities for Greenland Hong and MAGIC SOFTWARE
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Greenland and MAGIC is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Greenland Hong Kong and MAGIC SOFTWARE ENTR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGIC SOFTWARE ENTR and Greenland Hong 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 Greenland Hong Kong 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 ENTR has no effect on the direction of Greenland Hong i.e., Greenland Hong and MAGIC SOFTWARE go up and down completely randomly.
Pair Corralation between Greenland Hong and MAGIC SOFTWARE
Assuming the 90 days trading horizon Greenland Hong Kong is expected to generate 6.66 times more return on investment than MAGIC SOFTWARE. However, Greenland Hong is 6.66 times more volatile than MAGIC SOFTWARE ENTR. It trades about 0.06 of its potential returns per unit of risk. MAGIC SOFTWARE ENTR is currently generating about 0.02 per unit of risk. If you would invest 3.00 in Greenland Hong Kong on September 12, 2024 and sell it today you would earn a total of 0.05 from holding Greenland Hong Kong or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenland Hong Kong vs. MAGIC SOFTWARE ENTR
Performance |
| Timeline |
| Greenland Hong Kong |
| MAGIC SOFTWARE ENTR |
Greenland Hong and MAGIC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenland Hong and MAGIC SOFTWARE
The main advantage of trading using opposite Greenland Hong and MAGIC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenland Hong 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.| Greenland Hong vs. MAGIC SOFTWARE ENTR | Greenland Hong vs. CompuGroup Medical SE | Greenland Hong vs. Take Two Interactive Software | Greenland Hong vs. Clearside Biomedical |
| MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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