Correlation Between Virtus Investment and Magic Software
Can any of the company-specific risk be diversified away by investing in both Virtus Investment 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 Virtus Investment and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Investment Partners and Magic Software Enterprises, you can compare the effects of market volatilities on Virtus Investment 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 Virtus Investment with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Investment and Magic Software.
Diversification Opportunities for Virtus Investment and Magic Software
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtus and Magic is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners 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 Virtus Investment 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 Virtus Investment Partners 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 Virtus Investment i.e., Virtus Investment and Magic Software go up and down completely randomly.
Pair Corralation between Virtus Investment and Magic Software
Assuming the 90 days horizon Virtus Investment Partners is expected to generate 0.86 times more return on investment than Magic Software. However, Virtus Investment Partners is 1.16 times less risky than Magic Software. It trades about 0.28 of its potential returns per unit of risk. Magic Software Enterprises is currently generating about 0.15 per unit of risk. If you would invest 20,200 in Virtus Investment Partners on September 1, 2024 and sell it today you would earn a total of 3,200 from holding Virtus Investment Partners or generate 15.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Investment Partners vs. Magic Software Enterprises
Performance |
| Timeline |
| Virtus Investment |
| Magic Software Enter |
Virtus Investment and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Investment and Magic Software
The main advantage of trading using opposite Virtus Investment and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Investment 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.| Virtus Investment vs. MTI WIRELESS EDGE | Virtus Investment vs. REGAL ASIAN INVESTMENTS | Virtus Investment vs. SLR Investment Corp | Virtus Investment vs. AOYAMA TRADING |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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