Correlation Between Bitfarms and Magic Empire
Can any of the company-specific risk be diversified away by investing in both Bitfarms 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 Bitfarms and Magic Empire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitfarms and Magic Empire Global, you can compare the effects of market volatilities on Bitfarms 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 Bitfarms with a short position of Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitfarms and Magic Empire.
Diversification Opportunities for Bitfarms and Magic Empire
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bitfarms and Magic is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms 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 Bitfarms 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 Bitfarms 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 Bitfarms i.e., Bitfarms and Magic Empire go up and down completely randomly.
Pair Corralation between Bitfarms and Magic Empire
Given the investment horizon of 90 days Bitfarms is expected to generate 7.39 times less return on investment than Magic Empire. In addition to that, Bitfarms is 2.0 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 0.19 per unit of volatility. If you would invest 46.00 in Magic Empire Global on August 28, 2024 and sell it today you would earn a total of 7.00 from holding Magic Empire Global or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitfarms vs. Magic Empire Global
Performance |
| Timeline |
| Bitfarms |
| Magic Empire Global |
Bitfarms and Magic Empire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitfarms and Magic Empire
The main advantage of trading using opposite Bitfarms and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitfarms 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.| Bitfarms vs. PowerUp Acquisition Corp | Bitfarms vs. Aurora Innovation | Bitfarms vs. HUMANA INC | Bitfarms vs. Aquagold International |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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