Correlation Between Arena Group and Metalpha Technology
Can any of the company-specific risk be diversified away by investing in both Arena Group and Metalpha Technology 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 Arena Group and Metalpha Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arena Group Holdings and Metalpha Technology Holding, you can compare the effects of market volatilities on Arena Group and Metalpha Technology 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 Arena Group with a short position of Metalpha Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Group and Metalpha Technology.
Diversification Opportunities for Arena Group and Metalpha Technology
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Arena and Metalpha is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Arena Group Holdings and Metalpha Technology Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalpha Technology and Arena Group 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 Arena Group Holdings are associated (or correlated) with Metalpha Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalpha Technology has no effect on the direction of Arena Group i.e., Arena Group and Metalpha Technology go up and down completely randomly.
Pair Corralation between Arena Group and Metalpha Technology
Given the investment horizon of 90 days Arena Group Holdings is expected to generate 9.62 times more return on investment than Metalpha Technology. However, Arena Group is 9.62 times more volatile than Metalpha Technology Holding. It trades about 0.19 of its potential returns per unit of risk. Metalpha Technology Holding is currently generating about -0.21 per unit of risk. If you would invest 67.00 in Arena Group Holdings on August 27, 2024 and sell it today you would earn a total of 86.00 from holding Arena Group Holdings or generate 128.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arena Group Holdings vs. Metalpha Technology Holding
Performance |
| Timeline |
| Arena Group Holdings |
| Metalpha Technology |
Arena Group and Metalpha Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arena Group and Metalpha Technology
The main advantage of trading using opposite Arena Group and Metalpha Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arena Group position performs unexpectedly, Metalpha Technology 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 Metalpha Technology will offset losses from the drop in Metalpha Technology's long position.| Arena Group vs. Cerberus Cyber Sentinel | Arena Group vs. Alta Equipment Group | Arena Group vs. AN2 Therapeutics | Arena Group vs. KORE Group Holdings |
| Metalpha Technology vs. Omega Therapeutics | Metalpha Technology vs. Metalink | Metalpha Technology vs. Aquagold International | Metalpha Technology vs. Morningstar Unconstrained Allocation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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