Correlation Between Onfolio Holdings and Metalpha Technology

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

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

Diversification Opportunities for Onfolio Holdings and Metalpha Technology

-0.32

Correlation Coefficient

Onfolio Holdings  Metalpha Technology

Very good diversification

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

Pair Corralation between Onfolio Holdings and Metalpha Technology

Given the investment horizon of 90 days Onfolio Holdings is expected to generate 0.56 times more return on investment than Metalpha Technology. However, Onfolio Holdings is 1.78 times less risky than Metalpha Technology. It trades about 0.08 of its potential returns per unit of risk. Metalpha Technology Holding is currently generating about 0.04 per unit of risk. If you would invest  120.00  in Onfolio Holdings on November 29, 2024 and sell it today you would earn a total of  8.00  from holding Onfolio Holdings or generate 6.67% return on investment over 90 days.

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

Onfolio Holdings  vs.  Metalpha Technology Holding

Onfolio Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Onfolio Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Onfolio Holdings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Metalpha Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Metalpha Technology Holding are ranked lower than 13 (%) 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.

Pair Trading with Onfolio Holdings and Metalpha Technology

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

The idea behind Onfolio Holdings and Metalpha Technology Holding 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.