Correlation Between CHEMICAL INDUSTRIES and Magic Software
Can any of the company-specific risk be diversified away by investing in both CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHEMICAL INDUSTRIES and Magic Software Enterprises, you can compare the effects of market volatilities on CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHEMICAL INDUSTRIES and Magic Software.
Diversification Opportunities for CHEMICAL INDUSTRIES and Magic Software
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHEMICAL and Magic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES i.e., CHEMICAL INDUSTRIES and Magic Software go up and down completely randomly.
Pair Corralation between CHEMICAL INDUSTRIES and Magic Software
If you would invest 1,030 in Magic Software Enterprises on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Magic Software Enterprises or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
CHEMICAL INDUSTRIES vs. Magic Software Enterprises
Performance |
| Timeline |
| CHEMICAL INDUSTRIES |
| Magic Software Enter |
CHEMICAL INDUSTRIES and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHEMICAL INDUSTRIES and Magic Software
The main advantage of trading using opposite CHEMICAL INDUSTRIES and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHEMICAL INDUSTRIES 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.| CHEMICAL INDUSTRIES vs. Food Life Companies | CHEMICAL INDUSTRIES vs. TreeHouse Foods | CHEMICAL INDUSTRIES vs. Lifeway Foods | CHEMICAL INDUSTRIES vs. Dairy Farm International |
| Magic Software vs. Palo Alto Networks | Magic Software vs. Superior Plus Corp | Magic Software vs. NMI Holdings | Magic Software vs. SIVERS SEMICONDUCTORS AB |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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