Correlation Between XTANT MEDICAL and Magic Software
Can any of the company-specific risk be diversified away by investing in both XTANT MEDICAL 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 XTANT MEDICAL and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XTANT MEDICAL HLDGS and Magic Software Enterprises, you can compare the effects of market volatilities on XTANT MEDICAL 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 XTANT MEDICAL with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of XTANT MEDICAL and Magic Software.
Diversification Opportunities for XTANT MEDICAL and Magic Software
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XTANT and Magic is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding XTANT MEDICAL HLDGS 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 XTANT MEDICAL 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 XTANT MEDICAL HLDGS 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 XTANT MEDICAL i.e., XTANT MEDICAL and Magic Software go up and down completely randomly.
Pair Corralation between XTANT MEDICAL and Magic Software
Assuming the 90 days horizon XTANT MEDICAL HLDGS is expected to under-perform the Magic Software. But the stock apears to be less risky and, when comparing its historical volatility, XTANT MEDICAL HLDGS is 1.42 times less risky than Magic Software. The stock trades about -0.21 of its potential returns per unit of risk. The Magic Software Enterprises is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,018 in Magic Software Enterprises on September 28, 2024 and sell it today you would earn a total of 102.00 from holding Magic Software Enterprises or generate 10.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XTANT MEDICAL HLDGS vs. Magic Software Enterprises
Performance |
| Timeline |
| XTANT MEDICAL HLDGS |
| Magic Software Enter |
XTANT MEDICAL and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XTANT MEDICAL and Magic Software
The main advantage of trading using opposite XTANT MEDICAL and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XTANT MEDICAL 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.| XTANT MEDICAL vs. CVR Medical Corp | XTANT MEDICAL vs. RETAIL FOOD GROUP | XTANT MEDICAL vs. Clearside Biomedical | XTANT MEDICAL vs. Vastned Retail NV |
| Magic Software vs. GALENA MINING LTD | Magic Software vs. MCEWEN MINING INC | Magic Software vs. WIZZ AIR HLDGUNSPADR4 | Magic Software vs. GRIFFIN MINING LTD |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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