Correlation Between Metalpha Technology and Onfolio Holdings

Can any of the company-specific risk be diversified away by investing in both Metalpha Technology and Onfolio Holdings 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 Onfolio Holdings 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 Onfolio Holdings, you can compare the effects of market volatilities on Metalpha Technology and Onfolio Holdings 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 Onfolio Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalpha Technology and Onfolio Holdings.

Diversification Opportunities for Metalpha Technology and Onfolio Holdings

-0.12

Correlation Coefficient

Metalpha Technology  Onfolio Holdings

Good diversification

The 3 months correlation between Metalpha and Onfolio is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Metalpha Technology Holding and Onfolio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onfolio Holdings 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 Onfolio Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onfolio Holdings has no effect on the direction of Metalpha Technology i.e., Metalpha Technology and Onfolio Holdings go up and down completely randomly.

Pair Corralation between Metalpha Technology and Onfolio Holdings

Given the investment horizon of 90 days Metalpha Technology Holding is expected to generate 1.84 times more return on investment than Onfolio Holdings. However, Metalpha Technology is 1.84 times more volatile than Onfolio Holdings. It trades about 0.13 of its potential returns per unit of risk. Onfolio Holdings is currently generating about -0.09 per unit of risk. If you would invest  111.00  in Metalpha Technology Holding on December 30, 2024 and sell it today you would earn a total of  62.00  from holding Metalpha Technology Holding or generate 55.86% return on investment over 90 days.

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

Metalpha Technology Holding  vs.  Onfolio Holdings

Metalpha Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Metalpha Technology Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Metalpha Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Onfolio Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Onfolio Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Metalpha Technology and Onfolio Holdings

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

The idea behind Metalpha Technology Holding and Onfolio Holdings 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.