Correlation Between UOB Kay and Meta Public

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

By analyzing existing cross correlation between UOB Kay Hian and Meta Public, you can compare the effects of market volatilities on UOB Kay and Meta Public 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 UOB Kay with a short position of Meta Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of UOB Kay and Meta Public.

Diversification Opportunities for UOB Kay and Meta Public

-0.41

Correlation Coefficient

UOB Kay  Meta Public

Very good diversification

The 3 months correlation between UOB and Meta is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding UOB Kay Hian and Meta Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Public and UOB Kay 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 UOB Kay Hian are associated (or correlated) with Meta Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Public has no effect on the direction of UOB Kay i.e., UOB Kay and Meta Public go up and down completely randomly.

Pair Corralation between UOB Kay and Meta Public

Assuming the 90 days trading horizon UOB Kay Hian is expected to generate 0.46 times more return on investment than Meta Public. However, UOB Kay Hian is 2.19 times less risky than Meta Public. It trades about 0.05 of its potential returns per unit of risk. Meta Public is currently generating about -0.07 per unit of risk. If you would invest  505.00  in UOB Kay Hian on September 29, 2024 and sell it today you would earn a total of  25.00  from holding UOB Kay Hian or generate 4.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

UOB Kay Hian  vs.  Meta Public

UOB Kay Hian

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UOB Kay Hian are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, UOB Kay may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Meta Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meta Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with UOB Kay and Meta Public

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

The idea behind UOB Kay Hian and Meta Public 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.