Correlation Between Computer Age and METALIETF

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

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

Diversification Opportunities for Computer Age and METALIETF

0.73

Correlation Coefficient

Computer Age  METALIETF

Poor diversification

The 3 months correlation between Computer and METALIETF is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Computer Age Management and METALIETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METALIETF and Computer Age 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 Computer Age Management are associated (or correlated) with METALIETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METALIETF has no effect on the direction of Computer Age i.e., Computer Age and METALIETF go up and down completely randomly.

Pair Corralation between Computer Age and METALIETF

Assuming the 90 days trading horizon Computer Age is expected to generate 1.38 times less return on investment than METALIETF. In addition to that, Computer Age is 1.7 times more volatile than METALIETF. It trades about 0.05 of its total potential returns per unit of risk. METALIETF is currently generating about 0.12 per unit of volatility. If you would invest  866.00  in METALIETF on April 21, 2025 and sell it today you would earn a total of  82.00  from holding METALIETF or generate 9.47% return on investment over 90 days.

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

Computer Age Management  vs.  METALIETF

Computer Age Management

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Computer Age Management are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Computer Age may actually be approaching a critical reversion point that can send shares even higher in August 2025.

METALIETF

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in METALIETF are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, METALIETF may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Computer Age and METALIETF

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

The idea behind Computer Age Management and METALIETF 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.