Correlation Between Metalink and Hauppauge Digital

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

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

Diversification Opportunities for Metalink and Hauppauge Digital

0.23

Correlation Coefficient

Metalink  Hauppauge Digital

Modest diversification

The 3 months correlation between Metalink and Hauppauge is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Metalink and Hauppauge Digital OTC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hauppauge Digital OTC and Metalink 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 Metalink are associated (or correlated) with Hauppauge Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hauppauge Digital OTC has no effect on the direction of Metalink i.e., Metalink and Hauppauge Digital go up and down completely randomly.

Pair Corralation between Metalink and Hauppauge Digital

Given the investment horizon of 90 days Metalink is expected to generate 86.05 times more return on investment than Hauppauge Digital. However, Metalink is 86.05 times more volatile than Hauppauge Digital OTC. It trades about 0.04 of its potential returns per unit of risk. Hauppauge Digital OTC is currently generating about 0.0 per unit of risk. If you would invest  56.00  in Metalink on October 5, 2024 and sell it today you would lose (13.00) from holding Metalink or give up 23.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	3.44%
Values	Daily Returns

Metalink  vs.  Hauppauge Digital OTC

Metalink

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Metalink are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Metalink is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Hauppauge Digital OTC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Metalink and Hauppauge Digital

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

The idea behind Metalink and Hauppauge Digital OTC 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.