Correlation Between DUET Acquisition and Metal Sky

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

By analyzing existing cross correlation between DUET Acquisition Corp and Metal Sky Star, you can compare the effects of market volatilities on DUET Acquisition and Metal Sky 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 DUET Acquisition with a short position of Metal Sky. Check out your portfolio center. Please also check ongoing floating volatility patterns of DUET Acquisition and Metal Sky.

Diversification Opportunities for DUET Acquisition and Metal Sky

0.0

Correlation Coefficient

DUET Acquisition  Metal Sky

Pay attention - limited upside

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

Pair Corralation between DUET Acquisition and Metal Sky

If you would invest  5.01  in Metal Sky Star on December 27, 2024 and sell it today you would earn a total of  3.30  from holding Metal Sky Star or generate 65.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

DUET Acquisition Corp  vs.  Metal Sky Star

DUET Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days DUET Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, DUET Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Metal Sky Star

Risk-Adjusted Performance

Good

Over the last 90 days Metal Sky Star has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Metal Sky reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DUET Acquisition and Metal Sky

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

The idea behind DUET Acquisition Corp and Metal Sky Star 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.