Correlation Between Dongsin Engineering and MetaLabs

Can any of the company-specific risk be diversified away by investing in both Dongsin Engineering and MetaLabs 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 Dongsin Engineering and MetaLabs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dongsin Engineering Construction and MetaLabs Co, you can compare the effects of market volatilities on Dongsin Engineering and MetaLabs 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 Dongsin Engineering with a short position of MetaLabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongsin Engineering and MetaLabs.

Diversification Opportunities for Dongsin Engineering and MetaLabs

0.35

Correlation Coefficient

Dongsin Engineering  MetaLabs

Weak diversification

The 3 months correlation between Dongsin and MetaLabs is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dongsin Engineering Constructi and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs and Dongsin Engineering 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 Dongsin Engineering Construction are associated (or correlated) with MetaLabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaLabs has no effect on the direction of Dongsin Engineering i.e., Dongsin Engineering and MetaLabs go up and down completely randomly.

Pair Corralation between Dongsin Engineering and MetaLabs

Assuming the 90 days trading horizon Dongsin Engineering is expected to generate 10.1 times less return on investment than MetaLabs. In addition to that, Dongsin Engineering is 3.61 times more volatile than MetaLabs Co. It trades about 0.0 of its total potential returns per unit of risk. MetaLabs Co is currently generating about 0.1 per unit of volatility. If you would invest  132,200  in MetaLabs Co on December 26, 2024 and sell it today you would earn a total of  13,700  from holding MetaLabs Co or generate 10.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Dongsin Engineering Constructi  vs.  MetaLabs Co

Dongsin Engineering

Risk-Adjusted Performance

Weak

Over the last 90 days Dongsin Engineering Construction has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Dongsin Engineering is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

MetaLabs

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MetaLabs Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MetaLabs may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Dongsin Engineering and MetaLabs

The main advantage of trading using opposite Dongsin Engineering and MetaLabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongsin Engineering position performs unexpectedly, MetaLabs 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 MetaLabs will offset losses from the drop in MetaLabs' long position.

The idea behind Dongsin Engineering Construction and MetaLabs Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.