Correlation Between Top KingWin and Magic Empire
Can any of the company-specific risk be diversified away by investing in both Top KingWin 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 Top KingWin and Magic Empire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top KingWin and Magic Empire Global, you can compare the effects of market volatilities on Top KingWin 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 Top KingWin with a short position of Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top KingWin and Magic Empire.
Diversification Opportunities for Top KingWin and Magic Empire
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Top and Magic is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Top KingWin 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 Top KingWin 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 Top KingWin 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 Top KingWin i.e., Top KingWin and Magic Empire go up and down completely randomly.
Pair Corralation between Top KingWin and Magic Empire
Considering the 90-day investment horizon Top KingWin is expected to generate 2.03 times more return on investment than Magic Empire. However, Top KingWin is 2.03 times more volatile than Magic Empire Global. It trades about 0.0 of its potential returns per unit of risk. Magic Empire Global is currently generating about -0.01 per unit of risk. If you would invest 154.00 in Top KingWin on September 4, 2024 and sell it today you would lose (109.00) from holding Top KingWin or give up 70.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Top KingWin vs. Magic Empire Global
Performance |
| Timeline |
| Top KingWin |
| Magic Empire Global |
Top KingWin and Magic Empire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top KingWin and Magic Empire
The main advantage of trading using opposite Top KingWin and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top KingWin 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.| Top KingWin vs. Centessa Pharmaceuticals PLC | Top KingWin vs. Sligro Food Group | Top KingWin vs. SunOpta | Top KingWin vs. Lipocine |
| Magic Empire vs. Visa Class A | Magic Empire vs. Diamond Hill Investment | Magic Empire vs. Associated Capital Group | Magic Empire vs. Brookfield Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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