Correlation Between NewFlex Technology and MetaLabs
Can any of the company-specific risk be diversified away by investing in both NewFlex Technology and MetaLabs 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 NewFlex Technology and MetaLabs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewFlex Technology Co and MetaLabs Co, you can compare the effects of market volatilities on NewFlex Technology and MetaLabs 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 NewFlex Technology with a short position of MetaLabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewFlex Technology and MetaLabs.
Diversification Opportunities for NewFlex Technology and MetaLabs
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between NewFlex and MetaLabs is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding NewFlex Technology Co and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs and NewFlex Technology 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 NewFlex Technology Co are associated (or correlated) with MetaLabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaLabs has no effect on the direction of NewFlex Technology i.e., NewFlex Technology and MetaLabs go up and down completely randomly.
Pair Corralation between NewFlex Technology and MetaLabs
Assuming the 90 days trading horizon NewFlex Technology Co is expected to generate 2.23 times more return on investment than MetaLabs. However, NewFlex Technology is 2.23 times more volatile than MetaLabs Co. It trades about 0.08 of its potential returns per unit of risk. MetaLabs Co is currently generating about 0.12 per unit of risk. If you would invest 543,000 in NewFlex Technology Co on October 23, 2024 and sell it today you would earn a total of 22,000 from holding NewFlex Technology Co or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
NewFlex Technology Co vs. MetaLabs Co
Performance |
| Timeline |
| NewFlex Technology |
| MetaLabs |
NewFlex Technology and MetaLabs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewFlex Technology and MetaLabs
The main advantage of trading using opposite NewFlex Technology and MetaLabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewFlex Technology position performs unexpectedly, MetaLabs 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 MetaLabs will offset losses from the drop in MetaLabs' long position.| NewFlex Technology vs. DSC Investment | NewFlex Technology vs. Daol Investment Securities | NewFlex Technology vs. DB Financial Investment | NewFlex Technology vs. BGF Retail Co |
| MetaLabs vs. DB Financial Investment | MetaLabs vs. DB Insurance Co | MetaLabs vs. Duksan Hi Metal | MetaLabs vs. Jeju Bank |
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 Stocks Directory module to find actively traded stocks across global markets.
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