Correlation Between MetaLabs and Cheil Worldwide
Can any of the company-specific risk be diversified away by investing in both MetaLabs and Cheil Worldwide 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 Cheil Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetaLabs Co and Cheil Worldwide, you can compare the effects of market volatilities on MetaLabs and Cheil Worldwide 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 Cheil Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetaLabs and Cheil Worldwide.
Diversification Opportunities for MetaLabs and Cheil Worldwide
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MetaLabs and Cheil is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding MetaLabs Co and Cheil Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheil Worldwide 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 Cheil Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheil Worldwide has no effect on the direction of MetaLabs i.e., MetaLabs and Cheil Worldwide go up and down completely randomly.
Pair Corralation between MetaLabs and Cheil Worldwide
Assuming the 90 days trading horizon MetaLabs Co is expected to under-perform the Cheil Worldwide. In addition to that, MetaLabs is 4.7 times more volatile than Cheil Worldwide. It trades about -0.22 of its total potential returns per unit of risk. Cheil Worldwide is currently generating about -0.1 per unit of volatility. If you would invest 1,848,000 in Cheil Worldwide on September 2, 2024 and sell it today you would lose (27,000) from holding Cheil Worldwide or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetaLabs Co vs. Cheil Worldwide
Performance |
| Timeline |
| MetaLabs |
| Cheil Worldwide |
MetaLabs and Cheil Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetaLabs and Cheil Worldwide
The main advantage of trading using opposite MetaLabs and Cheil Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetaLabs position performs unexpectedly, Cheil Worldwide 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 Cheil Worldwide will offset losses from the drop in Cheil Worldwide's long position.| MetaLabs vs. LG Display | MetaLabs vs. Hyundai Motor Co | MetaLabs vs. Hyundai Motor Co | MetaLabs vs. Adaptive Plasma Technology |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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