Correlation Between Metalpha Technology and Howard Hughes

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

By analyzing existing cross correlation between Metalpha Technology Holding and Howard Hughes, you can compare the effects of market volatilities on Metalpha Technology and Howard Hughes 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 Metalpha Technology with a short position of Howard Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalpha Technology and Howard Hughes.

Diversification Opportunities for Metalpha Technology and Howard Hughes

-0.32

Correlation Coefficient

Metalpha Technology  Howard Hughes

Very good diversification

The 3 months correlation between Metalpha and Howard is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Metalpha Technology Holding and Howard Hughes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Howard Hughes and Metalpha Technology 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 Metalpha Technology Holding are associated (or correlated) with Howard Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Howard Hughes has no effect on the direction of Metalpha Technology i.e., Metalpha Technology and Howard Hughes go up and down completely randomly.

Pair Corralation between Metalpha Technology and Howard Hughes

Given the investment horizon of 90 days Metalpha Technology Holding is expected to under-perform the Howard Hughes. In addition to that, Metalpha Technology is 4.28 times more volatile than Howard Hughes. It trades about -0.02 of its total potential returns per unit of risk. Howard Hughes is currently generating about 0.18 per unit of volatility. If you would invest  7,380  in Howard Hughes on September 4, 2024 and sell it today you would earn a total of  1,186  from holding Howard Hughes or generate 16.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Metalpha Technology Holding  vs.  Howard Hughes

Metalpha Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metalpha Technology Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

Howard Hughes

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Howard Hughes are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Howard Hughes demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Metalpha Technology and Howard Hughes

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

The idea behind Metalpha Technology Holding and Howard Hughes 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.