Correlation Between Intelligent Living and Magic Empire
Can any of the company-specific risk be diversified away by investing in both Intelligent Living 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 Intelligent Living and Magic Empire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intelligent Living Application and Magic Empire Global, you can compare the effects of market volatilities on Intelligent Living 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 Intelligent Living with a short position of Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intelligent Living and Magic Empire.
Diversification Opportunities for Intelligent Living and Magic Empire
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intelligent and Magic is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Intelligent Living Application 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 Intelligent Living 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 Intelligent Living Application 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 Intelligent Living i.e., Intelligent Living and Magic Empire go up and down completely randomly.
Pair Corralation between Intelligent Living and Magic Empire
Given the investment horizon of 90 days Intelligent Living Application is expected to generate 1.22 times more return on investment than Magic Empire. However, Intelligent Living is 1.22 times more volatile than Magic Empire Global. It trades about 0.14 of its potential returns per unit of risk. Magic Empire Global is currently generating about 0.0 per unit of risk. If you would invest 44.00 in Intelligent Living Application on August 31, 2024 and sell it today you would earn a total of 58.00 from holding Intelligent Living Application or generate 131.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intelligent Living Application vs. Magic Empire Global
Performance |
| Timeline |
| Intelligent Living |
| Magic Empire Global |
Intelligent Living and Magic Empire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intelligent Living and Magic Empire
The main advantage of trading using opposite Intelligent Living and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intelligent Living 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.| Intelligent Living vs. Azek Company | Intelligent Living vs. Atlas Engineered Products | Intelligent Living vs. Antelope Enterprise Holdings | Intelligent Living vs. Latham Group |
| Magic Empire vs. PJT Partners | Magic Empire vs. Piper Sandler Companies | Magic Empire vs. Evercore Partners | Magic Empire vs. Moelis Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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