Correlation Between MetaLabs and DONGKUK TED

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

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

Diversification Opportunities for MetaLabs and DONGKUK TED

0.9

Correlation Coefficient

MetaLabs  DONGKUK TED

Almost no diversification

The 3 months correlation between MetaLabs and DONGKUK is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding MetaLabs Co and DONGKUK TED METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK TED 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 DONGKUK TED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK TED METAL has no effect on the direction of MetaLabs i.e., MetaLabs and DONGKUK TED go up and down completely randomly.

Pair Corralation between MetaLabs and DONGKUK TED

Assuming the 90 days trading horizon MetaLabs Co is expected to under-perform the DONGKUK TED. In addition to that, MetaLabs is 1.45 times more volatile than DONGKUK TED METAL. It trades about -0.09 of its total potential returns per unit of risk. DONGKUK TED METAL is currently generating about -0.03 per unit of volatility. If you would invest  656,000  in DONGKUK TED METAL on October 8, 2024 and sell it today you would lose (30,000) from holding DONGKUK TED METAL or give up 4.57% of portfolio value over 90 days.

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

MetaLabs Co  vs.  DONGKUK TED METAL

MetaLabs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MetaLabs Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

DONGKUK TED METAL

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with MetaLabs and DONGKUK TED

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

The idea behind MetaLabs Co and DONGKUK TED 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.