Correlation Between Magic Empire and ICOA

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

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

Diversification Opportunities for Magic Empire and ICOA

0.11

Correlation Coefficient

Magic Empire  ICOA

Average diversification

The 3 months correlation between Magic and ICOA is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Magic Empire Global and ICOA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICOA Inc and Magic Empire 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 Empire Global are associated (or correlated) with ICOA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICOA Inc has no effect on the direction of Magic Empire i.e., Magic Empire and ICOA go up and down completely randomly.

Pair Corralation between Magic Empire and ICOA

Given the investment horizon of 90 days Magic Empire Global is expected to under-perform the ICOA. But the stock apears to be less risky and, when comparing its historical volatility, Magic Empire Global is 22.79 times less risky than ICOA. The stock trades about -0.01 of its potential returns per unit of risk. The ICOA Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  0.00  in ICOA Inc on December 2, 2024 and sell it today you would earn a total of  0.01  from holding ICOA Inc or generate 9.223372036854776E16% return on investment over 90 days.

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

Magic Empire Global  vs.  ICOA Inc

Magic Empire Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Magic Empire Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

ICOA Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ICOA Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, ICOA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Magic Empire and ICOA

The main advantage of trading using opposite Magic Empire and ICOA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Empire position performs unexpectedly, ICOA 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 ICOA will offset losses from the drop in ICOA's long position.

The idea behind Magic Empire Global and ICOA Inc 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.