Correlation Between Metalliance and Waga Energy

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

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

Diversification Opportunities for Metalliance and Waga Energy

0.0

Correlation Coefficient

Metalliance  Waga Energy

Pay attention - limited upside

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

Pair Corralation between Metalliance and Waga Energy

If you would invest  850.00  in Metalliance SA on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Metalliance SA or generate 0.0% return on investment over 90 days.

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

Metalliance SA  vs.  Waga Energy SA

Metalliance SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metalliance SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Metalliance is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Waga Energy SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Waga Energy SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Waga Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Metalliance and Waga Energy

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

The idea behind Metalliance SA and Waga Energy SA 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.

Check out your portfolio center.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.