Correlation Between HIVE Blockchain and Magic Empire

Can any of the company-specific risk be diversified away by investing in both HIVE 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 HIVE 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 HIVE Blockchain Technologies and Magic Empire Global, you can compare the effects of market volatilities on HIVE 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 HIVE Blockchain with a short position of Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of HIVE Blockchain and Magic Empire.

Diversification Opportunities for HIVE Blockchain and Magic Empire

0.53

Correlation Coefficient

HIVE Blockchain  Magic Empire

Very weak diversification

The 3 months correlation between HIVE and Magic is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding HIVE Blockchain Technologies 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 HIVE 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 HIVE Blockchain Technologies 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 HIVE Blockchain i.e., HIVE Blockchain and Magic Empire go up and down completely randomly.

Pair Corralation between HIVE Blockchain and Magic Empire

Given the investment horizon of 90 days HIVE Blockchain Technologies is expected to under-perform the Magic Empire. But the stock apears to be less risky and, when comparing its historical volatility, HIVE Blockchain Technologies is 1.07 times less risky than Magic Empire. The stock trades about -0.12 of its potential returns per unit of risk. The Magic Empire Global is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  73.00  in Magic Empire Global on March 4, 2024 and sell it today you would lose (13.00) from holding Magic Empire Global or give up 17.81% of portfolio value over 90 days.

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

HIVE Blockchain Technologies  vs.  Magic Empire Global

HIVE Blockchain Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HIVE Blockchain Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Magic Empire Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Magic Empire Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in July 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with HIVE Blockchain and Magic Empire

The main advantage of trading using opposite HIVE Blockchain and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HIVE 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 HIVE Blockchain Technologies 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 CEOs Directory module to screen CEOs from public companies around the world.