Correlation Between MAGIC SOFTWARE and CEOTRONICS (CEKSG)
Can any of the company-specific risk be diversified away by investing in both MAGIC SOFTWARE and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) 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 CEOTRONICS, you can compare the effects of market volatilities on MAGIC SOFTWARE and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGIC SOFTWARE and CEOTRONICS (CEKSG).
Diversification Opportunities for MAGIC SOFTWARE and CEOTRONICS (CEKSG)
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MAGIC and CEOTRONICS is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding MAGIC SOFTWARE ENTR and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS (CEKSG) has no effect on the direction of MAGIC SOFTWARE i.e., MAGIC SOFTWARE and CEOTRONICS (CEKSG) go up and down completely randomly.
Pair Corralation between MAGIC SOFTWARE and CEOTRONICS (CEKSG)
Assuming the 90 days trading horizon MAGIC SOFTWARE is expected to generate 6.91 times less return on investment than CEOTRONICS (CEKSG). In addition to that, MAGIC SOFTWARE is 1.02 times more volatile than CEOTRONICS. It trades about 0.01 of its total potential returns per unit of risk. CEOTRONICS is currently generating about 0.06 per unit of volatility. If you would invest 375.00 in CEOTRONICS on September 11, 2024 and sell it today you would earn a total of 310.00 from holding CEOTRONICS or generate 82.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
MAGIC SOFTWARE ENTR vs. CEOTRONICS
Performance |
Timeline |
MAGIC SOFTWARE ENTR |
CEOTRONICS (CEKSG) |
MAGIC SOFTWARE and CEOTRONICS (CEKSG) Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MAGIC SOFTWARE and CEOTRONICS (CEKSG)
The main advantage of trading using opposite MAGIC SOFTWARE and CEOTRONICS (CEKSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAGIC SOFTWARE position performs unexpectedly, CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) will offset losses from the drop in CEOTRONICS (CEKSG)'s long position.MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc |
CEOTRONICS (CEKSG) vs. Apple Inc | CEOTRONICS (CEKSG) vs. Apple Inc | CEOTRONICS (CEKSG) vs. Apple Inc | CEOTRONICS (CEKSG) vs. Apple Inc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Transaction History View history of all your transactions and understand their impact on performance | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |