Correlation Between Wallbox NV and Meta Materials

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

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

Diversification Opportunities for Wallbox NV and Meta Materials

0.88

Correlation Coefficient

Wallbox NV  Meta Materials

Very poor diversification

The 3 months correlation between Wallbox and Meta is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Wallbox NV and Meta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Materials and Wallbox NV 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 Wallbox NV are associated (or correlated) with Meta Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Materials has no effect on the direction of Wallbox NV i.e., Wallbox NV and Meta Materials go up and down completely randomly.

Pair Corralation between Wallbox NV and Meta Materials

Considering the 90-day investment horizon Wallbox NV is expected to under-perform the Meta Materials. But the stock apears to be less risky and, when comparing its historical volatility, Wallbox NV is 8.78 times less risky than Meta Materials. The stock trades about -0.21 of its potential returns per unit of risk. The Meta Materials is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  45.00  in Meta Materials on September 2, 2024 and sell it today you would lose (38.90) from holding Meta Materials or give up 86.44% of portfolio value over 90 days.

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

Wallbox NV  vs.  Meta Materials

Wallbox NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wallbox NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Meta Materials

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Meta Materials are ranked lower than 4 (%) 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.

Pair Trading with Wallbox NV and Meta Materials

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

The idea behind Wallbox NV and Meta Materials 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.