Correlation Between Magic Empire and Oppenheimer Holdings
Can any of the company-specific risk be diversified away by investing in both Magic Empire and Oppenheimer Holdings 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 Oppenheimer Holdings 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 Oppenheimer Holdings, you can compare the effects of market volatilities on Magic Empire and Oppenheimer Holdings 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 Oppenheimer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Empire and Oppenheimer Holdings.
Diversification Opportunities for Magic Empire and Oppenheimer Holdings
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Magic and Oppenheimer is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Magic Empire Global and Oppenheimer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Holdings 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 Oppenheimer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Holdings has no effect on the direction of Magic Empire i.e., Magic Empire and Oppenheimer Holdings go up and down completely randomly.
Pair Corralation between Magic Empire and Oppenheimer Holdings
Given the investment horizon of 90 days Magic Empire Global is expected to generate 8.92 times more return on investment than Oppenheimer Holdings. However, Magic Empire is 8.92 times more volatile than Oppenheimer Holdings. It trades about 0.12 of its potential returns per unit of risk. Oppenheimer Holdings is currently generating about 0.45 per unit of risk. If you would invest 50.00 in Magic Empire Global on October 24, 2024 and sell it today you would earn a total of 10.00 from holding Magic Empire Global or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Empire Global vs. Oppenheimer Holdings
Performance |
| Timeline |
| Magic Empire Global |
| Oppenheimer Holdings |
Magic Empire and Oppenheimer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Empire and Oppenheimer Holdings
The main advantage of trading using opposite Magic Empire and Oppenheimer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Empire position performs unexpectedly, Oppenheimer Holdings 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 Oppenheimer Holdings will offset losses from the drop in Oppenheimer Holdings' long position.| Magic Empire vs. Netcapital | Magic Empire vs. Applied Digital | Magic Empire vs. Zhong Yang Financial | Magic Empire vs. Mercurity Fintech Holding |
| Oppenheimer Holdings vs. PJT Partners | Oppenheimer Holdings vs. Houlihan Lokey | Oppenheimer Holdings vs. Stifel Financial | Oppenheimer Holdings vs. Evercore Partners |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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