Correlation Between Gold Ent and Majic Wheels

Can any of the company-specific risk be diversified away by investing in both Gold Ent and Majic Wheels 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 Gold Ent and Majic Wheels into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gold Ent Group and Majic Wheels Corp, you can compare the effects of market volatilities on Gold Ent and Majic Wheels 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 Gold Ent with a short position of Majic Wheels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Ent and Majic Wheels.

Diversification Opportunities for Gold Ent and Majic Wheels

0.0

Correlation Coefficient

Gold Ent  Majic Wheels

Pay attention - limited upside

The 3 months correlation between Gold and Majic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gold Ent Group and Majic Wheels Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Majic Wheels Corp and Gold Ent 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 Gold Ent Group are associated (or correlated) with Majic Wheels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Majic Wheels Corp has no effect on the direction of Gold Ent i.e., Gold Ent and Majic Wheels go up and down completely randomly.

Pair Corralation between Gold Ent and Majic Wheels

If you would invest  0.01  in Majic Wheels Corp on May 7, 2025 and sell it today you would earn a total of  0.00  from holding Majic Wheels Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Gold Ent Group  vs.  Majic Wheels Corp

Gold Ent Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gold Ent Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Gold Ent is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Majic Wheels Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Majic Wheels Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Majic Wheels is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Gold Ent and Majic Wheels

The main advantage of trading using opposite Gold Ent and Majic Wheels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Ent position performs unexpectedly, Majic Wheels 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 Majic Wheels will offset losses from the drop in Majic Wheels' long position.

The idea behind Gold Ent Group and Majic Wheels Corp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.