Correlation Between Magic Empire and Digimarc
Can any of the company-specific risk be diversified away by investing in both Magic Empire and Digimarc 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 Digimarc 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 Digimarc, you can compare the effects of market volatilities on Magic Empire and Digimarc 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 Digimarc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Empire and Digimarc.
Diversification Opportunities for Magic Empire and Digimarc
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Magic and Digimarc is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Magic Empire Global and Digimarc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digimarc 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 Digimarc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digimarc has no effect on the direction of Magic Empire i.e., Magic Empire and Digimarc go up and down completely randomly.
Pair Corralation between Magic Empire and Digimarc
Given the investment horizon of 90 days Magic Empire is expected to generate 4.43 times less return on investment than Digimarc. But when comparing it to its historical volatility, Magic Empire Global is 1.08 times less risky than Digimarc. It trades about 0.02 of its potential returns per unit of risk. Digimarc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,103 in Digimarc on August 25, 2024 and sell it today you would earn a total of 164.00 from holding Digimarc or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Magic Empire Global vs. Digimarc
Performance |
| Timeline |
| Magic Empire Global |
| Digimarc |
Magic Empire and Digimarc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Empire and Digimarc
The main advantage of trading using opposite Magic Empire and Digimarc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Empire position performs unexpectedly, Digimarc 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 Digimarc will offset losses from the drop in Digimarc's long position.| Magic Empire vs. Netcapital | Magic Empire vs. Applied Blockchain | Magic Empire vs. Zhong Yang Financial | Magic Empire vs. Mercurity Fintech Holding |
| Digimarc vs. Magic Empire Global | Digimarc vs. Zhong Yang Financial | Digimarc vs. Netcapital | Digimarc vs. Lazard |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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