Correlation Between Southern Trust and Magic Empire

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

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

Diversification Opportunities for Southern Trust and Magic Empire

0.0

Correlation Coefficient

Southern Trust  Magic Empire

Pay attention - limited upside

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

Pair Corralation between Southern Trust and Magic Empire

If you would invest  0.00  in Southern Trust Securities on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Southern Trust Securities or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Southern Trust Securities  vs.  Magic Empire Global

Southern Trust Securities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Southern Trust Securities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Southern Trust is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with Southern Trust and Magic Empire

The main advantage of trading using opposite Southern Trust and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Trust 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 Southern Trust Securities 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 Valuation module to check real value of public entities based on technical and fundamental data.