Correlation Between MetaLabs and Lindeman Asia
Can any of the company-specific risk be diversified away by investing in both MetaLabs and Lindeman Asia 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 Lindeman Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetaLabs Co and Lindeman Asia Investment, you can compare the effects of market volatilities on MetaLabs and Lindeman Asia 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 Lindeman Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetaLabs and Lindeman Asia.
Diversification Opportunities for MetaLabs and Lindeman Asia
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MetaLabs and Lindeman is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding MetaLabs Co and Lindeman Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindeman Asia Investment 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 Lindeman Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindeman Asia Investment has no effect on the direction of MetaLabs i.e., MetaLabs and Lindeman Asia go up and down completely randomly.
Pair Corralation between MetaLabs and Lindeman Asia
Assuming the 90 days trading horizon MetaLabs Co is expected to under-perform the Lindeman Asia. But the stock apears to be less risky and, when comparing its historical volatility, MetaLabs Co is 1.12 times less risky than Lindeman Asia. The stock trades about -0.28 of its potential returns per unit of risk. The Lindeman Asia Investment is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 388,000 in Lindeman Asia Investment on September 5, 2024 and sell it today you would lose (47,000) from holding Lindeman Asia Investment or give up 12.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetaLabs Co vs. Lindeman Asia Investment
Performance |
| Timeline |
| MetaLabs |
| Lindeman Asia Investment |
MetaLabs and Lindeman Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetaLabs and Lindeman Asia
The main advantage of trading using opposite MetaLabs and Lindeman Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetaLabs position performs unexpectedly, Lindeman Asia 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 Lindeman Asia will offset losses from the drop in Lindeman Asia's long position.| MetaLabs vs. Seohee Construction Co | MetaLabs vs. CKH Food Health | MetaLabs vs. Organic Special Pet | MetaLabs vs. Dongwoo Farm To |
| Lindeman Asia vs. MetaLabs Co | Lindeman Asia vs. Hyundai Industrial Co | Lindeman Asia vs. Kbi Metal Co | Lindeman Asia vs. Dongil Technology |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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