Correlation Between SAMG Entertainment and MetaLabs

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

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

Diversification Opportunities for SAMG Entertainment and MetaLabs

0.51

Correlation Coefficient

SAMG Entertainment  MetaLabs

Very weak diversification

The 3 months correlation between SAMG and MetaLabs is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SAMG Entertainment Co and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs and SAMG Entertainment 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 SAMG Entertainment Co 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 SAMG Entertainment i.e., SAMG Entertainment and MetaLabs go up and down completely randomly.

Pair Corralation between SAMG Entertainment and MetaLabs

Assuming the 90 days trading horizon SAMG Entertainment Co is expected to generate 3.16 times more return on investment than MetaLabs. However, SAMG Entertainment is 3.16 times more volatile than MetaLabs Co. It trades about 0.29 of its potential returns per unit of risk. MetaLabs Co is currently generating about 0.09 per unit of risk. 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

SAMG Entertainment Co  vs.  MetaLabs Co

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.

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.

Pair Trading with SAMG Entertainment and MetaLabs

The main advantage of trading using opposite SAMG Entertainment and MetaLabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAMG Entertainment 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 SAMG Entertainment Co 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.