Correlation Between Aurora Innovation and Magic Empire
Can any of the company-specific risk be diversified away by investing in both Aurora Innovation 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 Aurora Innovation and Magic Empire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Innovation and Magic Empire Global, you can compare the effects of market volatilities on Aurora Innovation 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 Aurora Innovation with a short position of Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Innovation and Magic Empire.
Diversification Opportunities for Aurora Innovation and Magic Empire
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aurora and Magic is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Innovation 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 Aurora Innovation 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 Aurora Innovation 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 Aurora Innovation i.e., Aurora Innovation and Magic Empire go up and down completely randomly.
Pair Corralation between Aurora Innovation and Magic Empire
Considering the 90-day investment horizon Aurora Innovation is expected to generate 1.77 times less return on investment than Magic Empire. In addition to that, Aurora Innovation is 2.59 times more volatile than Magic Empire Global. It trades about 0.01 of its total potential returns per unit of risk. Magic Empire Global is currently generating about 0.04 per unit of volatility. If you would invest 51.00 in Magic Empire Global on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Magic Empire Global or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Innovation vs. Magic Empire Global
Performance |
| Timeline |
| Aurora Innovation |
| Magic Empire Global |
Aurora Innovation and Magic Empire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Innovation and Magic Empire
The main advantage of trading using opposite Aurora Innovation and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Innovation 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.| Aurora Innovation vs. FiscalNote Holdings | Aurora Innovation vs. Innodata | Aurora Innovation vs. International Business Machines | Aurora Innovation vs. BigBearai Holdings |
| Magic Empire vs. Netcapital | Magic Empire vs. Applied Blockchain | Magic Empire vs. Zhong Yang Financial | Magic Empire vs. Mercurity Fintech Holding |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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