Correlation Between Metal Sky and LIV Capital

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

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

Diversification Opportunities for Metal Sky and LIV Capital

0.0

Correlation Coefficient

Metal Sky  LIV Capital

Pay attention - limited upside

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

Pair Corralation between Metal Sky and LIV Capital

If you would invest  3.21  in Metal Sky Star on December 21, 2024 and sell it today you would lose (1.05) from holding Metal Sky Star or give up 32.71% of portfolio value over 90 days.

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

Metal Sky Star  vs.  LIV Capital Acquisition

Metal Sky Star

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Metal Sky Star are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Metal Sky showed solid returns over the last few months and may actually be approaching a breakup point.

LIV Capital Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days LIV Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental drivers, LIV Capital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Metal Sky and LIV Capital

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

The idea behind Metal Sky Star and LIV Capital Acquisition 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.