Correlation Between MetaLabs and DB Insurance
Can any of the company-specific risk be diversified away by investing in both MetaLabs and DB Insurance 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 MetaLabs and DB Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetaLabs Co and DB Insurance Co, you can compare the effects of market volatilities on MetaLabs and DB Insurance 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 MetaLabs with a short position of DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetaLabs and DB Insurance.
Diversification Opportunities for MetaLabs and DB Insurance
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MetaLabs and 005830 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding MetaLabs Co and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance and MetaLabs 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 MetaLabs Co are associated (or correlated) with DB Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Insurance has no effect on the direction of MetaLabs i.e., MetaLabs and DB Insurance go up and down completely randomly.
Pair Corralation between MetaLabs and DB Insurance
Assuming the 90 days trading horizon MetaLabs Co is expected to generate 0.6 times more return on investment than DB Insurance. However, MetaLabs Co is 1.67 times less risky than DB Insurance. It trades about 0.06 of its potential returns per unit of risk. DB Insurance Co is currently generating about -0.09 per unit of risk. If you would invest 131,800 in MetaLabs Co on November 3, 2024 and sell it today you would earn a total of 2,200 from holding MetaLabs Co or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetaLabs Co vs. DB Insurance Co
Performance |
| Timeline |
| MetaLabs |
| DB Insurance |
MetaLabs and DB Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetaLabs and DB Insurance
The main advantage of trading using opposite MetaLabs and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetaLabs position performs unexpectedly, DB Insurance 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 DB Insurance will offset losses from the drop in DB Insurance's long position.| MetaLabs vs. Dongbang Transport Logistics | MetaLabs vs. KMH Hitech Co | MetaLabs vs. Korea Alcohol Industrial | MetaLabs vs. Orbitech Co |
| DB Insurance vs. DB Financial Investment | DB Insurance vs. BIT Computer Co | DB Insurance vs. Incar Financial Service | DB Insurance vs. Shinhan Financial Group |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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