Correlation Between MAGIC SOFTWARE and Brockhaus Capital
Can any of the company-specific risk be diversified away by investing in both MAGIC SOFTWARE and Brockhaus Capital 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 Brockhaus Capital 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 Brockhaus Capital Management, you can compare the effects of market volatilities on MAGIC SOFTWARE and Brockhaus Capital 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 Brockhaus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGIC SOFTWARE and Brockhaus Capital.
Diversification Opportunities for MAGIC SOFTWARE and Brockhaus Capital
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MAGIC and Brockhaus is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding MAGIC SOFTWARE ENTR and Brockhaus Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brockhaus Capital 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 Brockhaus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brockhaus Capital has no effect on the direction of MAGIC SOFTWARE i.e., MAGIC SOFTWARE and Brockhaus Capital go up and down completely randomly.
Pair Corralation between MAGIC SOFTWARE and Brockhaus Capital
Assuming the 90 days trading horizon MAGIC SOFTWARE ENTR is expected to generate 1.09 times more return on investment than Brockhaus Capital. However, MAGIC SOFTWARE is 1.09 times more volatile than Brockhaus Capital Management. It trades about 0.12 of its potential returns per unit of risk. Brockhaus Capital Management is currently generating about -0.11 per unit of risk. If you would invest 910.00 in MAGIC SOFTWARE ENTR on September 9, 2024 and sell it today you would earn a total of 190.00 from holding MAGIC SOFTWARE ENTR or generate 20.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MAGIC SOFTWARE ENTR vs. Brockhaus Capital Management
Performance |
Timeline |
MAGIC SOFTWARE ENTR |
Brockhaus Capital |
MAGIC SOFTWARE and Brockhaus Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MAGIC SOFTWARE and Brockhaus Capital
The main advantage of trading using opposite MAGIC SOFTWARE and Brockhaus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGIC SOFTWARE position performs unexpectedly, Brockhaus Capital 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 Brockhaus Capital will offset losses from the drop in Brockhaus Capital's long position.MAGIC SOFTWARE vs. National Storage Affiliates | MAGIC SOFTWARE vs. Public Storage | MAGIC SOFTWARE vs. TERADATA | MAGIC SOFTWARE vs. Gruppo Mutuionline SpA |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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