Correlation Between Inolife Technologies and Magic Empire

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

By analyzing existing cross correlation between Inolife Technologies and Magic Empire Global, you can compare the effects of market volatilities on Inolife Technologies 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 Inolife Technologies with a short position of Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inolife Technologies and Magic Empire.

Diversification Opportunities for Inolife Technologies and Magic Empire

0.0

Correlation Coefficient

Inolife Technologies  Magic Empire

Pay attention - limited upside

The 3 months correlation between Inolife and Magic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Inolife Technologies 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 Inolife Technologies 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 Inolife Technologies 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 Inolife Technologies i.e., Inolife Technologies and Magic Empire go up and down completely randomly.

Pair Corralation between Inolife Technologies and Magic Empire

If you would invest  43.00  in Magic Empire Global on September 4, 2024 and sell it today you would earn a total of  7.00  from holding Magic Empire Global or generate 16.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Inolife Technologies  vs.  Magic Empire Global

Inolife Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inolife Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Inolife Technologies is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Magic Empire Global

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Magic Empire Global are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal technical and fundamental indicators, Magic Empire disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inolife Technologies and Magic Empire

The main advantage of trading using opposite Inolife Technologies and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inolife Technologies 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.

The idea behind Inolife Technologies and Magic Empire Global 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.