Correlation Between Singapore Telecommunicatio and MAGIC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio 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 Singapore Telecommunicatio and MAGIC SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Telecommunications Limited and MAGIC SOFTWARE ENTR, you can compare the effects of market volatilities on Singapore Telecommunicatio 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 Singapore Telecommunicatio with a short position of MAGIC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and MAGIC SOFTWARE.
Diversification Opportunities for Singapore Telecommunicatio and MAGIC SOFTWARE
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Singapore and MAGIC is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L 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 Singapore Telecommunicatio 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 Singapore Telecommunications Limited 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 Singapore Telecommunicatio i.e., Singapore Telecommunicatio and MAGIC SOFTWARE go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and MAGIC SOFTWARE
Assuming the 90 days trading horizon Singapore Telecommunicatio is expected to generate 1.4 times less return on investment than MAGIC SOFTWARE. But when comparing it to its historical volatility, Singapore Telecommunications Limited is 1.51 times less risky than MAGIC SOFTWARE. It trades about 0.03 of its potential returns per unit of risk. MAGIC SOFTWARE ENTR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,020 in MAGIC SOFTWARE ENTR on August 30, 2024 and sell it today you would earn a total of 10.00 from holding MAGIC SOFTWARE ENTR or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Singapore Telecommunications L vs. MAGIC SOFTWARE ENTR
Performance |
| Timeline |
| Singapore Telecommunicatio |
| MAGIC SOFTWARE ENTR |
Singapore Telecommunicatio and MAGIC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and MAGIC SOFTWARE
The main advantage of trading using opposite Singapore Telecommunicatio and MAGIC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio 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.| Singapore Telecommunicatio vs. Verizon Communications | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Deutsche Telekom AG |
| MAGIC SOFTWARE vs. Transport International Holdings | MAGIC SOFTWARE vs. Coor Service Management | MAGIC SOFTWARE vs. Cleanaway Waste Management | MAGIC SOFTWARE vs. Transportadora de Gas |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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