Correlation Between Tinybeans Group and Metalpha Technology

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

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

Diversification Opportunities for Tinybeans Group and Metalpha Technology

-0.86

Correlation Coefficient

Tinybeans Group  Metalpha Technology

Pay attention - limited upside

The 3 months correlation between Tinybeans and Metalpha is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Tinybeans Group Limited and Metalpha Technology Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalpha Technology and Tinybeans Group 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 Tinybeans Group Limited 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 Tinybeans Group i.e., Tinybeans Group and Metalpha Technology go up and down completely randomly.

Pair Corralation between Tinybeans Group and Metalpha Technology

Assuming the 90 days horizon Tinybeans Group Limited is expected to generate 4.69 times more return on investment than Metalpha Technology. However, Tinybeans Group is 4.69 times more volatile than Metalpha Technology Holding. It trades about 0.03 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  22.00  in Tinybeans Group Limited on December 2, 2024 and sell it today you would lose (21.80) from holding Tinybeans Group Limited or give up 99.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Tinybeans Group Limited  vs.  Metalpha Technology Holding

Tinybeans Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tinybeans Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 12 (%) 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 Tinybeans Group and Metalpha Technology

The main advantage of trading using opposite Tinybeans Group and Metalpha Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tinybeans Group 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 Tinybeans Group Limited 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.