Correlation Between Aquagold International and Magic Empire
Can any of the company-specific risk be diversified away by investing in both Aquagold International and Magic Empire 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 Aquagold International and Magic Empire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Magic Empire Global, you can compare the effects of market volatilities on Aquagold International and Magic Empire 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 Aquagold International with a short position of Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Magic Empire.
Diversification Opportunities for Aquagold International and Magic Empire
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aquagold and Magic is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Magic Empire Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magic Empire Global and Aquagold International 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 Aquagold International are associated (or correlated) with Magic Empire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magic Empire Global has no effect on the direction of Aquagold International i.e., Aquagold International and Magic Empire go up and down completely randomly.
Pair Corralation between Aquagold International and Magic Empire
Given the investment horizon of 90 days Aquagold International is expected to under-perform the Magic Empire. In addition to that, Aquagold International is 6.88 times more volatile than Magic Empire Global. It trades about -0.22 of its total potential returns per unit of risk. Magic Empire Global is currently generating about -0.18 per unit of volatility. If you would invest 53.00 in Magic Empire Global on September 26, 2024 and sell it today you would lose (6.00) from holding Magic Empire Global or give up 11.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Aquagold International vs. Magic Empire Global
Performance |
Timeline |
Aquagold International |
Magic Empire Global |
Aquagold International and Magic Empire Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aquagold International and Magic Empire
The main advantage of trading using opposite Aquagold International and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Magic Empire 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 Empire will offset losses from the drop in Magic Empire's long position.Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
Magic Empire vs. Aquagold International | Magic Empire vs. Morningstar Unconstrained Allocation | Magic Empire vs. Thrivent High Yield | Magic Empire vs. Via Renewables |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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