Correlation Between Meta Financial and POSBO UNSPADRS/20YC1

Can any of the company-specific risk be diversified away by investing in both Meta Financial and POSBO UNSPADRS/20YC1 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 Meta Financial and POSBO UNSPADRS/20YC1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Meta Financial Group and POSBO UNSPADRS20YC1, you can compare the effects of market volatilities on Meta Financial and POSBO UNSPADRS/20YC1 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 Meta Financial with a short position of POSBO UNSPADRS/20YC1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Financial and POSBO UNSPADRS/20YC1.

Diversification Opportunities for Meta Financial and POSBO UNSPADRS/20YC1

-0.37

Correlation Coefficient

Meta Financial  POSBO UNSPADRS/20YC1

Very good diversification

The 3 months correlation between Meta and POSBO is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Meta Financial Group and POSBO UNSPADRS20YC1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSBO UNSPADRS/20YC1 and Meta Financial 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 Meta Financial Group are associated (or correlated) with POSBO UNSPADRS/20YC1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSBO UNSPADRS/20YC1 has no effect on the direction of Meta Financial i.e., Meta Financial and POSBO UNSPADRS/20YC1 go up and down completely randomly.

Pair Corralation between Meta Financial and POSBO UNSPADRS/20YC1

Assuming the 90 days horizon Meta Financial Group is expected to under-perform the POSBO UNSPADRS/20YC1. In addition to that, Meta Financial is 1.09 times more volatile than POSBO UNSPADRS20YC1. It trades about -0.08 of its total potential returns per unit of risk. POSBO UNSPADRS20YC1 is currently generating about 0.16 per unit of volatility. If you would invest  1,037  in POSBO UNSPADRS20YC1 on December 20, 2024 and sell it today you would earn a total of  153.00  from holding POSBO UNSPADRS20YC1 or generate 14.75% return on investment over 90 days.

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

Meta Financial Group  vs.  POSBO UNSPADRS20YC1

Meta Financial Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meta Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

POSBO UNSPADRS/20YC1

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in POSBO UNSPADRS20YC1 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, POSBO UNSPADRS/20YC1 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Meta Financial and POSBO UNSPADRS/20YC1

The main advantage of trading using opposite Meta Financial and POSBO UNSPADRS/20YC1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Financial position performs unexpectedly, POSBO UNSPADRS/20YC1 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 POSBO UNSPADRS/20YC1 will offset losses from the drop in POSBO UNSPADRS/20YC1's long position.

The idea behind Meta Financial Group and POSBO UNSPADRS20YC1 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.