Correlation Between MetaLabs and SAMG Entertainment

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

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

Diversification Opportunities for MetaLabs and SAMG Entertainment

0.51

Correlation Coefficient

MetaLabs  SAMG Entertainment

Very weak diversification

The 3 months correlation between MetaLabs and SAMG is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding MetaLabs Co and SAMG Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMG Entertainment 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 SAMG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAMG Entertainment has no effect on the direction of MetaLabs i.e., MetaLabs and SAMG Entertainment go up and down completely randomly.

Pair Corralation between MetaLabs and SAMG Entertainment

Assuming the 90 days trading horizon MetaLabs is expected to generate 10.16 times less return on investment than SAMG Entertainment. But when comparing it to its historical volatility, MetaLabs Co is 3.16 times less risky than SAMG Entertainment. It trades about 0.09 of its potential returns per unit of risk. SAMG Entertainment Co is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  1,323,000  in SAMG Entertainment Co on December 24, 2024 and sell it today you would earn a total of  1,847,000  from holding SAMG Entertainment Co or generate 139.61% return on investment over 90 days.

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

MetaLabs Co  vs.  SAMG Entertainment Co

MetaLabs

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MetaLabs Co are ranked lower than 7 (%) 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.

SAMG Entertainment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SAMG Entertainment Co are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SAMG Entertainment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MetaLabs and SAMG Entertainment

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

The idea behind MetaLabs Co and SAMG Entertainment 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.