Correlation Between Associated Capital and Magic Empire
Can any of the company-specific risk be diversified away by investing in both Associated Capital 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 Associated Capital and Magic Empire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Magic Empire Global, you can compare the effects of market volatilities on Associated Capital 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 Associated Capital with a short position of Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Magic Empire.
Diversification Opportunities for Associated Capital and Magic Empire
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Associated and Magic is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group 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 Associated Capital 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 Associated Capital Group 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 Associated Capital i.e., Associated Capital and Magic Empire go up and down completely randomly.
Pair Corralation between Associated Capital and Magic Empire
Allowing for the 90-day total investment horizon Associated Capital Group is expected to under-perform the Magic Empire. But the stock apears to be less risky and, when comparing its historical volatility, Associated Capital Group is 9.78 times less risky than Magic Empire. The stock trades about 0.0 of its potential returns per unit of risk. The Magic Empire Global is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 138.00 in Magic Empire Global on September 12, 2024 and sell it today you would lose (86.00) from holding Magic Empire Global or give up 62.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Magic Empire Global
Performance |
| Timeline |
| Associated Capital |
| Magic Empire Global |
Associated Capital and Magic Empire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Magic Empire
The main advantage of trading using opposite Associated Capital and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital 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.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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