Correlation Between MetaLabs and Jahwa Electron

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

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

Diversification Opportunities for MetaLabs and Jahwa Electron

-0.39

Correlation Coefficient

MetaLabs  Jahwa Electron

Very good diversification

The 3 months correlation between MetaLabs and Jahwa is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding MetaLabs Co and Jahwa Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jahwa Electron and MetaLabs 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 MetaLabs Co are associated (or correlated) with Jahwa Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jahwa Electron has no effect on the direction of MetaLabs i.e., MetaLabs and Jahwa Electron go up and down completely randomly.

Pair Corralation between MetaLabs and Jahwa Electron

Assuming the 90 days trading horizon MetaLabs is expected to generate 1.17 times less return on investment than Jahwa Electron. But when comparing it to its historical volatility, MetaLabs Co is 1.97 times less risky than Jahwa Electron. It trades about 0.1 of its potential returns per unit of risk. Jahwa Electron is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,201,000  in Jahwa Electron on December 26, 2024 and sell it today you would earn a total of  114,000  from holding Jahwa Electron or generate 9.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MetaLabs Co  vs.  Jahwa Electron

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.

Jahwa Electron

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jahwa Electron are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jahwa Electron sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MetaLabs and Jahwa Electron

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

The idea behind MetaLabs Co and Jahwa Electron 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.