Correlation Between Azek and Magic Empire

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Azek 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 Azek and Magic Empire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azek Company and Magic Empire Global, you can compare the effects of market volatilities on Azek 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 Azek with a short position of Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azek and Magic Empire.

Diversification Opportunities for Azek and Magic Empire

0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between Azek and Magic is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Azek Company 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 Azek 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 Azek Company 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 Azek i.e., Azek and Magic Empire go up and down completely randomly.

Pair Corralation between Azek and Magic Empire

Given the investment horizon of 90 days Azek is expected to generate 3.13 times less return on investment than Magic Empire. But when comparing it to its historical volatility, Azek Company is 8.68 times less risky than Magic Empire. It trades about 0.16 of its potential returns per unit of risk. Magic Empire Global is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  126.00  in Magic Empire Global on May 4, 2025 and sell it today you would earn a total of  13.00  from holding Magic Empire Global or generate 10.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy63.49%
ValuesDaily Returns

Azek Company  vs.  Magic Empire Global

 Performance 
       Timeline  
Azek Company 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Over the last 90 days Azek Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite weak technical and fundamental indicators, Azek disclosed solid returns over the last few months and may actually be approaching a breakup point.
Magic Empire Global 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Magic Empire Global are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Magic Empire disclosed solid returns over the last few months and may actually be approaching a breakup point.

Azek and Magic Empire Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Azek and Magic Empire

The main advantage of trading using opposite Azek and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azek 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.
The idea behind Azek Company and Magic Empire Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

Other Complementary Tools

Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios