Correlation Between Meta Materials and Neonode

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

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

Diversification Opportunities for Meta Materials and Neonode

0.59

Correlation Coefficient

Meta Materials  Neonode

Very weak diversification

The 3 months correlation between Meta and Neonode is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Meta Materials and Neonode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neonode and Meta Materials 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 Meta Materials are associated (or correlated) with Neonode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neonode has no effect on the direction of Meta Materials i.e., Meta Materials and Neonode go up and down completely randomly.

Pair Corralation between Meta Materials and Neonode

Given the investment horizon of 90 days Meta Materials is expected to generate 5.56 times more return on investment than Neonode. However, Meta Materials is 5.56 times more volatile than Neonode. It trades about 0.03 of its potential returns per unit of risk. Neonode is currently generating about 0.02 per unit of risk. If you would invest  37.00  in Meta Materials on September 13, 2024 and sell it today you would lose (36.99) from holding Meta Materials or give up 99.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Meta Materials  vs.  Neonode

Meta Materials

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Meta Materials are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Meta Materials unveiled solid returns over the last few months and may actually be approaching a breakup point.

Neonode

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Neonode are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Neonode may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Meta Materials and Neonode

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

The idea behind Meta Materials and Neonode 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.