Correlation Between OVERSEA CHINUNSPADR/2 and Meta Financial
Can any of the company-specific risk be diversified away by investing in both OVERSEA CHINUNSPADR/2 and Meta Financial 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 OVERSEA CHINUNSPADR/2 and Meta Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OVERSEA CHINUNSPADR2 and Meta Financial Group, you can compare the effects of market volatilities on OVERSEA CHINUNSPADR/2 and Meta Financial 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 OVERSEA CHINUNSPADR/2 with a short position of Meta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of OVERSEA CHINUNSPADR/2 and Meta Financial.
Diversification Opportunities for OVERSEA CHINUNSPADR/2 and Meta Financial
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OVERSEA and Meta is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding OVERSEA CHINUNSPADR2 and Meta Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Financial Group and OVERSEA CHINUNSPADR/2 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 OVERSEA CHINUNSPADR2 are associated (or correlated) with Meta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Financial Group has no effect on the direction of OVERSEA CHINUNSPADR/2 i.e., OVERSEA CHINUNSPADR/2 and Meta Financial go up and down completely randomly.
Pair Corralation between OVERSEA CHINUNSPADR/2 and Meta Financial
Assuming the 90 days trading horizon OVERSEA CHINUNSPADR/2 is expected to generate 1.45 times less return on investment than Meta Financial. But when comparing it to its historical volatility, OVERSEA CHINUNSPADR2 is 1.16 times less risky than Meta Financial. It trades about 0.15 of its potential returns per unit of risk. Meta Financial Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 7,150 in Meta Financial Group on November 3, 2024 and sell it today you would earn a total of 450.00 from holding Meta Financial Group or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OVERSEA CHINUNSPADR2 vs. Meta Financial Group
Performance |
| Timeline |
| OVERSEA CHINUNSPADR/2 |
| Meta Financial Group |
OVERSEA CHINUNSPADR/2 and Meta Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OVERSEA CHINUNSPADR/2 and Meta Financial
The main advantage of trading using opposite OVERSEA CHINUNSPADR/2 and Meta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OVERSEA CHINUNSPADR/2 position performs unexpectedly, Meta Financial 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 Meta Financial will offset losses from the drop in Meta Financial's long position.| OVERSEA CHINUNSPADR/2 vs. Cognizant Technology Solutions | OVERSEA CHINUNSPADR/2 vs. BII Railway Transportation | OVERSEA CHINUNSPADR/2 vs. DXC Technology Co | OVERSEA CHINUNSPADR/2 vs. SCOTT TECHNOLOGY |
| Meta Financial vs. POSBO UNSPADRS20YC1 | Meta Financial vs. Postal Savings Bank | Meta Financial vs. Oversea Chinese Banking | Meta Financial vs. UNICREDIT SPA ADR |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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