Correlation Between MAGIC SOFTWARE and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both MAGIC SOFTWARE and Apollo Investment 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 Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAGIC SOFTWARE ENTR and Apollo Investment Corp, you can compare the effects of market volatilities on MAGIC SOFTWARE and Apollo Investment 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 Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGIC SOFTWARE and Apollo Investment.
Diversification Opportunities for MAGIC SOFTWARE and Apollo Investment
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MAGIC and Apollo is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding MAGIC SOFTWARE ENTR and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp 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 ENTR are associated (or correlated) with Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of MAGIC SOFTWARE i.e., MAGIC SOFTWARE and Apollo Investment go up and down completely randomly.
Pair Corralation between MAGIC SOFTWARE and Apollo Investment
Assuming the 90 days trading horizon MAGIC SOFTWARE ENTR is expected to generate 1.75 times more return on investment than Apollo Investment. However, MAGIC SOFTWARE is 1.75 times more volatile than Apollo Investment Corp. It trades about 0.09 of its potential returns per unit of risk. Apollo Investment Corp is currently generating about -0.07 per unit of risk. If you would invest 1,120 in MAGIC SOFTWARE ENTR on December 21, 2024 and sell it today you would earn a total of 120.00 from holding MAGIC SOFTWARE ENTR or generate 10.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MAGIC SOFTWARE ENTR vs. Apollo Investment Corp
Performance |
Timeline |
MAGIC SOFTWARE ENTR |
Apollo Investment Corp |
MAGIC SOFTWARE and Apollo Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MAGIC SOFTWARE and Apollo Investment
The main advantage of trading using opposite MAGIC SOFTWARE and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGIC SOFTWARE position performs unexpectedly, Apollo Investment 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 Apollo Investment will offset losses from the drop in Apollo Investment's long position.MAGIC SOFTWARE vs. Harmony Gold Mining | MAGIC SOFTWARE vs. MEDCAW INVESTMENTS LS 01 | MAGIC SOFTWARE vs. REGAL ASIAN INVESTMENTS | MAGIC SOFTWARE vs. SCANSOURCE |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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