Correlation Between Alkame Holdings and Metro

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

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

Diversification Opportunities for Alkame Holdings and Metro

0.0

Correlation Coefficient

Alkame Holdings  Metro

Pay attention - limited upside

The 3 months correlation between Alkame and Metro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alkame Holdings and Metro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Inc and Alkame Holdings 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 Alkame Holdings are associated (or correlated) with Metro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Inc has no effect on the direction of Alkame Holdings i.e., Alkame Holdings and Metro go up and down completely randomly.

Pair Corralation between Alkame Holdings and Metro

If you would invest  5,038  in Metro Inc on October 7, 2024 and sell it today you would earn a total of  1,217  from holding Metro Inc or generate 24.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.95%
Values	Daily Returns

Alkame Holdings  vs.  Metro Inc

Alkame Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alkame Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking signals, Alkame Holdings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Metro Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Metro Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Metro is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Alkame Holdings and Metro

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

The idea behind Alkame Holdings and Metro Inc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.