Correlation Between Empire Global and Magellan Midstream
Can any of the company-specific risk be diversified away by investing in both Empire Global and Magellan Midstream 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 Empire Global and Magellan Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Global Gaming and Magellan Midstream Partners, you can compare the effects of market volatilities on Empire Global and Magellan Midstream 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 Empire Global with a short position of Magellan Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Global and Magellan Midstream.
Diversification Opportunities for Empire Global and Magellan Midstream
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Empire and Magellan is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Empire Global Gaming and Magellan Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Midstream and Empire Global 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 Empire Global Gaming are associated (or correlated) with Magellan Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Midstream has no effect on the direction of Empire Global i.e., Empire Global and Magellan Midstream go up and down completely randomly.
Pair Corralation between Empire Global and Magellan Midstream
Given the investment horizon of 90 days Empire Global Gaming is expected to under-perform the Magellan Midstream. In addition to that, Empire Global is 10.21 times more volatile than Magellan Midstream Partners. It trades about -0.01 of its total potential returns per unit of risk. Magellan Midstream Partners is currently generating about 0.15 per unit of volatility. If you would invest 4,854 in Magellan Midstream Partners on September 3, 2024 and sell it today you would earn a total of 1,697 from holding Magellan Midstream Partners or generate 34.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 30.91% |
| Values | Daily Returns |
Empire Global Gaming vs. Magellan Midstream Partners
Performance |
| Timeline |
| Empire Global Gaming |
| Magellan Midstream |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Empire Global and Magellan Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Global and Magellan Midstream
The main advantage of trading using opposite Empire Global and Magellan Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Global position performs unexpectedly, Magellan Midstream 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 Magellan Midstream will offset losses from the drop in Magellan Midstream's long position.| Empire Global vs. Everi Holdings | Empire Global vs. Intema Solutions | Empire Global vs. 888 Holdings | Empire Global vs. Real Luck Group |
| Magellan Midstream vs. Kinder Morgan | Magellan Midstream vs. Enterprise Products Partners | Magellan Midstream vs. Williams Companies | Magellan Midstream vs. MPLX LP |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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