Correlation Between Locafy and Metalpha Technology
Can any of the company-specific risk be diversified away by investing in both Locafy 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 Locafy and Metalpha Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locafy and Metalpha Technology Holding, you can compare the effects of market volatilities on Locafy 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 Locafy with a short position of Metalpha Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locafy and Metalpha Technology.
Diversification Opportunities for Locafy and Metalpha Technology
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Locafy and Metalpha is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Locafy and Metalpha Technology Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalpha Technology and Locafy 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 Locafy 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 Locafy i.e., Locafy and Metalpha Technology go up and down completely randomly.
Pair Corralation between Locafy and Metalpha Technology
Given the investment horizon of 90 days Locafy is expected to under-perform the Metalpha Technology. But the stock apears to be less risky and, when comparing its historical volatility, Locafy is 1.15 times less risky than Metalpha Technology. The stock trades about -0.07 of its potential returns per unit of risk. The Metalpha Technology Holding is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 161.00 in Metalpha Technology Holding on November 18, 2024 and sell it today you would earn a total of 109.00 from holding Metalpha Technology Holding or generate 67.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Locafy vs. Metalpha Technology Holding
Performance |
| Timeline |
| Locafy |
| Metalpha Technology |
Locafy and Metalpha Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locafy and Metalpha Technology
The main advantage of trading using opposite Locafy and Metalpha Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locafy 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.| Locafy vs. Metalpha Technology Holding | Locafy vs. 36Kr Holdings | Locafy vs. TuanChe ADR | Locafy vs. Quizam Media |
| Metalpha Technology vs. Omega Therapeutics | Metalpha Technology vs. Atlas Resources International | Metalpha Technology vs. Industry Source Consulting | Metalpha Technology vs. Aquagold International |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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