Correlation Between Magic Software and PLAYSTUDIOS

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

By analyzing existing cross correlation between Magic Software Enterprises and PLAYSTUDIOS A DL 0001, you can compare the effects of market volatilities on Magic Software and PLAYSTUDIOS 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 Magic Software with a short position of PLAYSTUDIOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and PLAYSTUDIOS.

Diversification Opportunities for Magic Software and PLAYSTUDIOS

0.78

Correlation Coefficient

Magic Software  PLAYSTUDIOS

Poor diversification

The 3 months correlation between Magic and PLAYSTUDIOS is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and PLAYSTUDIOS A DL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYSTUDIOS A DL and Magic Software 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 Magic Software Enterprises are associated (or correlated) with PLAYSTUDIOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYSTUDIOS A DL has no effect on the direction of Magic Software i.e., Magic Software and PLAYSTUDIOS go up and down completely randomly.

Pair Corralation between Magic Software and PLAYSTUDIOS

Assuming the 90 days horizon Magic Software Enterprises is expected to generate 0.88 times more return on investment than PLAYSTUDIOS. However, Magic Software Enterprises is 1.14 times less risky than PLAYSTUDIOS. It trades about 0.03 of its potential returns per unit of risk. PLAYSTUDIOS A DL 0001 is currently generating about -0.04 per unit of risk. If you would invest  946.00  in Magic Software Enterprises on October 24, 2024 and sell it today you would earn a total of  234.00  from holding Magic Software Enterprises or generate 24.74% return on investment over 90 days.

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

Magic Software Enterprises  vs.  PLAYSTUDIOS A DL 0001

Magic Software Enter

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Magic Software Enterprises are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Magic Software reported solid returns over the last few months and may actually be approaching a breakup point.

PLAYSTUDIOS A DL

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYSTUDIOS A DL 0001 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, PLAYSTUDIOS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Magic Software and PLAYSTUDIOS

The main advantage of trading using opposite Magic Software and PLAYSTUDIOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, PLAYSTUDIOS 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 PLAYSTUDIOS will offset losses from the drop in PLAYSTUDIOS's long position.

The idea behind Magic Software Enterprises and PLAYSTUDIOS A DL 0001 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.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.