Correlation Between Brockhaus Capital and MAGIC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital 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 Brockhaus Capital and MAGIC SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and MAGIC SOFTWARE ENTR, you can compare the effects of market volatilities on Brockhaus Capital 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 Brockhaus Capital with a short position of MAGIC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and MAGIC SOFTWARE.
Diversification Opportunities for Brockhaus Capital and MAGIC SOFTWARE
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brockhaus and MAGIC is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management 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 Brockhaus Capital 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 Brockhaus Capital Management 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 Brockhaus Capital i.e., Brockhaus Capital and MAGIC SOFTWARE go up and down completely randomly.
Pair Corralation between Brockhaus Capital and MAGIC SOFTWARE
Assuming the 90 days trading horizon Brockhaus Capital Management is expected to under-perform the MAGIC SOFTWARE. But the stock apears to be less risky and, when comparing its historical volatility, Brockhaus Capital Management is 1.65 times less risky than MAGIC SOFTWARE. The stock trades about -0.06 of its potential returns per unit of risk. The MAGIC SOFTWARE ENTR is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,010 in MAGIC SOFTWARE ENTR on September 7, 2024 and sell it today you would earn a total of 110.00 from holding MAGIC SOFTWARE ENTR or generate 10.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Brockhaus Capital Management vs. MAGIC SOFTWARE ENTR
Performance |
Timeline |
Brockhaus Capital |
MAGIC SOFTWARE ENTR |
Brockhaus Capital and MAGIC SOFTWARE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brockhaus Capital and MAGIC SOFTWARE
The main advantage of trading using opposite Brockhaus Capital and MAGIC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital 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.Brockhaus Capital vs. WillScot Mobile Mini | Brockhaus Capital vs. Ribbon Communications | Brockhaus Capital vs. NORTHEAST UTILITIES | Brockhaus Capital vs. Darden Restaurants |
MAGIC SOFTWARE vs. Calibre Mining Corp | MAGIC SOFTWARE vs. MCEWEN MINING INC | MAGIC SOFTWARE vs. Evolution Mining Limited | MAGIC SOFTWARE vs. Sunny Optical Technology |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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