Correlation Between MetaLabs and Duksan Hi

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

By analyzing existing cross correlation between MetaLabs Co and Duksan Hi Metal, you can compare the effects of market volatilities on MetaLabs and Duksan Hi 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 Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetaLabs and Duksan Hi.

Diversification Opportunities for MetaLabs and Duksan Hi

0.42

Correlation Coefficient

MetaLabs  Duksan Hi

Very weak diversification

The 3 months correlation between MetaLabs and Duksan is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding MetaLabs Co and Duksan Hi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duksan Hi Metal 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 Duksan Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duksan Hi Metal has no effect on the direction of MetaLabs i.e., MetaLabs and Duksan Hi go up and down completely randomly.

Pair Corralation between MetaLabs and Duksan Hi

Assuming the 90 days trading horizon MetaLabs Co is expected to under-perform the Duksan Hi. But the stock apears to be less risky and, when comparing its historical volatility, MetaLabs Co is 1.0 times less risky than Duksan Hi. The stock trades about -0.03 of its potential returns per unit of risk. The Duksan Hi Metal is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  565,000  in Duksan Hi Metal on December 4, 2024 and sell it today you would lose (160,000) from holding Duksan Hi Metal or give up 28.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

MetaLabs Co  vs.  Duksan Hi Metal

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.

Duksan Hi Metal

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Duksan Hi Metal are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Duksan Hi sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MetaLabs and Duksan Hi

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

The idea behind MetaLabs Co and Duksan Hi Metal 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.