Correlation Between Riot Blockchain and Magic Empire

Can any of the company-specific risk be diversified away by investing in both Riot Blockchain 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 Riot Blockchain and Magic Empire into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Riot Blockchain and Magic Empire Global, you can compare the effects of market volatilities on Riot Blockchain 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 Riot Blockchain with a short position of Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Riot Blockchain and Magic Empire.

Diversification Opportunities for Riot Blockchain and Magic Empire

0.41

Correlation Coefficient

Riot Blockchain  Magic Empire

Very weak diversification

The 3 months correlation between Riot and Magic is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Riot Blockchain 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 Riot Blockchain 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 Riot Blockchain 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 Riot Blockchain i.e., Riot Blockchain and Magic Empire go up and down completely randomly.

Pair Corralation between Riot Blockchain and Magic Empire

Given the investment horizon of 90 days Riot Blockchain is expected to generate 1.12 times less return on investment than Magic Empire. But when comparing it to its historical volatility, Riot Blockchain is 2.72 times less risky than Magic Empire. It trades about 0.29 of its potential returns per unit of risk. Magic Empire Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  45.00  in Magic Empire Global on July 16, 2024 and sell it today you would earn a total of  7.00  from holding Magic Empire Global or generate 15.56% return on investment over 90 days.

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

Riot Blockchain  vs.  Magic Empire Global

Riot Blockchain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Riot Blockchain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in November 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Magic Empire Global

Risk-Adjusted Performance

1 of 100

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 uncertain technical and fundamental indicators, Magic Empire may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with Riot Blockchain and Magic Empire

The main advantage of trading using opposite Riot Blockchain and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Riot Blockchain 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 Riot Blockchain 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.