Correlation Between Magic Empire and AssetMark Financial

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

Diversification Opportunities for Magic Empire and AssetMark Financial

-0.49

Correlation Coefficient

Magic Empire  AssetMark Financial

Very good diversification

The 3 months correlation between Magic and AssetMark is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Magic Empire Global and AssetMark Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AssetMark Financial 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 AssetMark Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AssetMark Financial has no effect on the direction of Magic Empire i.e., Magic Empire and AssetMark Financial go up and down completely randomly.

Pair Corralation between Magic Empire and AssetMark Financial

Given the investment horizon of 90 days Magic Empire Global is expected to under-perform the AssetMark Financial. In addition to that, Magic Empire is 2.94 times more volatile than AssetMark Financial Holdings. It trades about -0.04 of its total potential returns per unit of risk. AssetMark Financial Holdings is currently generating about 0.06 per unit of volatility. If you would invest  3,258  in AssetMark Financial Holdings on February 17, 2024 and sell it today you would earn a total of  143.50  from holding AssetMark Financial Holdings or generate 4.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Magic Empire Global  vs.  AssetMark Financial Holdings

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 latest weak performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

AssetMark Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AssetMark Financial Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent primary indicators, AssetMark Financial is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Magic Empire and AssetMark Financial

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

The idea behind Magic Empire Global and AssetMark Financial Holdings 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.