Correlation Between Global Mofy and Magic Software

Can any of the company-specific risk be diversified away by investing in both Global Mofy 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 Global Mofy and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Mofy Metaverse and Magic Software Enterprises, you can compare the effects of market volatilities on Global Mofy 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 Global Mofy with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Mofy and Magic Software.

Diversification Opportunities for Global Mofy and Magic Software

0.84

Correlation Coefficient

Global Mofy  Magic Software

Very poor diversification

The 3 months correlation between Global and Magic is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Global Mofy Metaverse 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 Global Mofy 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 Global Mofy Metaverse 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 Global Mofy i.e., Global Mofy and Magic Software go up and down completely randomly.

Pair Corralation between Global Mofy and Magic Software

Considering the 90-day investment horizon Global Mofy Metaverse is expected to generate 55.05 times more return on investment than Magic Software. However, Global Mofy is 55.05 times more volatile than Magic Software Enterprises. It trades about 0.13 of its potential returns per unit of risk. Magic Software Enterprises is currently generating about 0.11 per unit of risk. If you would invest  40.00  in Global Mofy Metaverse on October 23, 2024 and sell it today you would earn a total of  347.00  from holding Global Mofy Metaverse or generate 867.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Global Mofy Metaverse  vs.  Magic Software Enterprises

Global Mofy Metaverse

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Mofy Metaverse are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Global Mofy displayed solid returns over the last few months and may actually be approaching a breakup point.

Magic Software Enter

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Magic Software Enterprises are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, Magic Software exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Mofy and Magic Software

The main advantage of trading using opposite Global Mofy and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Mofy 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.

The idea behind Global Mofy Metaverse and Magic Software Enterprises pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.