Correlation Between Magic Empire and Bitfarms
Can any of the company-specific risk be diversified away by investing in both Magic Empire and Bitfarms 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 Magic Empire and Bitfarms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magic Empire Global and Bitfarms, you can compare the effects of market volatilities on Magic Empire and Bitfarms 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 Magic Empire with a short position of Bitfarms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Empire and Bitfarms.
Diversification Opportunities for Magic Empire and Bitfarms
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Magic and Bitfarms is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Magic Empire Global and Bitfarms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitfarms and Magic Empire 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 Magic Empire Global are associated (or correlated) with Bitfarms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitfarms has no effect on the direction of Magic Empire i.e., Magic Empire and Bitfarms go up and down completely randomly.
Pair Corralation between Magic Empire and Bitfarms
Given the investment horizon of 90 days Magic Empire Global is expected to generate 0.5 times more return on investment than Bitfarms. However, Magic Empire Global is 2.0 times less risky than Bitfarms. It trades about 0.19 of its potential returns per unit of risk. Bitfarms is currently generating about 0.01 per unit of risk. 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 |
Magic Empire Global vs. Bitfarms
Performance |
| Timeline |
| Magic Empire Global |
| Bitfarms |
Magic Empire and Bitfarms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Empire and Bitfarms
The main advantage of trading using opposite Magic Empire and Bitfarms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Empire position performs unexpectedly, Bitfarms 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 Bitfarms will offset losses from the drop in Bitfarms' long position.| Magic Empire vs. Netcapital | Magic Empire vs. Applied Blockchain | Magic Empire vs. Zhong Yang Financial | Magic Empire vs. Mercurity Fintech Holding |
| Bitfarms vs. PowerUp Acquisition Corp | Bitfarms vs. Aurora Innovation | Bitfarms vs. HUMANA INC | Bitfarms vs. Aquagold International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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