Correlation Between Magic Empire and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both Magic Empire and Goldman Sachs 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 Goldman Sachs 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 The Goldman Sachs, you can compare the effects of market volatilities on Magic Empire and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Empire and Goldman Sachs.

Diversification Opportunities for Magic Empire and Goldman Sachs

0.03

Correlation Coefficient

Magic Empire  Goldman Sachs

Significant diversification

The 3 months correlation between Magic and Goldman is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Magic Empire Global and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs has no effect on the direction of Magic Empire i.e., Magic Empire and Goldman Sachs go up and down completely randomly.

Pair Corralation between Magic Empire and Goldman Sachs

Given the investment horizon of 90 days Magic Empire Global is expected to generate 5.6 times more return on investment than Goldman Sachs. However, Magic Empire is 5.6 times more volatile than The Goldman Sachs. It trades about 0.02 of its potential returns per unit of risk. The Goldman Sachs is currently generating about -0.02 per unit of risk. If you would invest  137.00  in Magic Empire Global on July 30, 2025 and sell it today you would earn a total of  1.00  from holding Magic Empire Global or generate 0.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Magic Empire Global  vs.  The Goldman Sachs

Magic Empire Global

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Magic Empire Global are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Magic Empire is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Goldman Sachs

Risk-Adjusted Performance

Weakest

Over the last 90 days The Goldman Sachs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Magic Empire and Goldman Sachs

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

The idea behind Magic Empire Global and The Goldman Sachs 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.

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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.