Correlation Between Osang Healthcare and MetaLabs

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

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

Diversification Opportunities for Osang Healthcare and MetaLabs

0.21

Correlation Coefficient

Osang Healthcare  MetaLabs

Modest diversification

The 3 months correlation between Osang and MetaLabs is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Osang Healthcare Co,Ltd and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs and Osang Healthcare 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 Osang Healthcare Co,Ltd 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 Osang Healthcare i.e., Osang Healthcare and MetaLabs go up and down completely randomly.

Pair Corralation between Osang Healthcare and MetaLabs

Assuming the 90 days trading horizon Osang Healthcare Co,Ltd is expected to under-perform the MetaLabs. In addition to that, Osang Healthcare is 1.3 times more volatile than MetaLabs Co. It trades about -0.05 of its total potential returns per unit of risk. MetaLabs Co is currently generating about -0.03 per unit of volatility. If you would invest  290,000  in MetaLabs Co on December 4, 2024 and sell it today you would lose (150,300) from holding MetaLabs Co or give up 51.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	49.27%
Values	Daily Returns

Osang Healthcare Co,Ltd  vs.  MetaLabs Co

Osang Healthcare Co,Ltd

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Osang Healthcare Co,Ltd are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Osang Healthcare sustained solid returns over the last few months and may actually be approaching a breakup point.

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 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Osang Healthcare and MetaLabs

The main advantage of trading using opposite Osang Healthcare and MetaLabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osang Healthcare 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 Osang Healthcare Co,Ltd 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.