Correlation Between Shopify and MQGAU

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

By analyzing existing cross correlation between Shopify and MQGAU 5491 09 NOV 33, you can compare the effects of market volatilities on Shopify and MQGAU 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 Shopify with a short position of MQGAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shopify and MQGAU.

Diversification Opportunities for Shopify and MQGAU

0.25

Correlation Coefficient

Shopify  MQGAU

Modest diversification

The 3 months correlation between Shopify and MQGAU is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Shopify and MQGAU 5491 09 NOV 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MQGAU 5491 09 and Shopify 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 Shopify are associated (or correlated) with MQGAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MQGAU 5491 09 has no effect on the direction of Shopify i.e., Shopify and MQGAU go up and down completely randomly.

Pair Corralation between Shopify and MQGAU

Given the investment horizon of 90 days Shopify is expected to under-perform the MQGAU. In addition to that, Shopify is 5.17 times more volatile than MQGAU 5491 09 NOV 33. It trades about -0.01 of its total potential returns per unit of risk. MQGAU 5491 09 NOV 33 is currently generating about 0.25 per unit of volatility. If you would invest  9,962  in MQGAU 5491 09 NOV 33 on December 24, 2024 and sell it today you would earn a total of  346.00  from holding MQGAU 5491 09 NOV 33 or generate 3.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	35.0%
Values	Daily Returns

Shopify  vs.  MQGAU 5491 09 NOV 33

Shopify

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shopify has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Shopify is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

MQGAU 5491 09

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MQGAU 5491 09 NOV 33 are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, MQGAU may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Shopify and MQGAU

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

The idea behind Shopify and MQGAU 5491 09 NOV 33 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.