Correlation Between MetaLabs and COWINTECH
Can any of the company-specific risk be diversified away by investing in both MetaLabs and COWINTECH 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 COWINTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetaLabs Co and COWINTECH Co, you can compare the effects of market volatilities on MetaLabs and COWINTECH 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 COWINTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetaLabs and COWINTECH.
Diversification Opportunities for MetaLabs and COWINTECH
Modest diversification
The 3 months correlation between MetaLabs and COWINTECH is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding MetaLabs Co and COWINTECH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COWINTECH 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 COWINTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COWINTECH has no effect on the direction of MetaLabs i.e., MetaLabs and COWINTECH go up and down completely randomly.
Pair Corralation between MetaLabs and COWINTECH
Assuming the 90 days trading horizon MetaLabs Co is expected to generate 1.07 times more return on investment than COWINTECH. However, MetaLabs is 1.07 times more volatile than COWINTECH Co. It trades about -0.26 of its potential returns per unit of risk. COWINTECH Co is currently generating about -0.39 per unit of risk. If you would invest 159,000 in MetaLabs Co on September 3, 2024 and sell it today you would lose (26,500) from holding MetaLabs Co or give up 16.67% 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. COWINTECH Co
Performance |
| Timeline |
| MetaLabs |
| COWINTECH |
MetaLabs and COWINTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetaLabs and COWINTECH
The main advantage of trading using opposite MetaLabs and COWINTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetaLabs position performs unexpectedly, COWINTECH 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 COWINTECH will offset losses from the drop in COWINTECH's long position.| MetaLabs vs. Korea Real Estate | MetaLabs vs. Busan Industrial Co | MetaLabs vs. UNISEM Co | MetaLabs vs. RPBio Inc |
| COWINTECH vs. Korea Refract | COWINTECH vs. Korea Refractories Co | COWINTECH vs. Shinhan Inverse WTI | COWINTECH vs. SAMYOUNG M Tek Co |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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