Correlation Between Everspin Technologies and Meta Materials

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Can any of the company-specific risk be diversified away by investing in both Everspin Technologies 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 Everspin Technologies and Meta Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everspin Technologies and Meta Materials, you can compare the effects of market volatilities on Everspin Technologies 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 Everspin Technologies with a short position of Meta Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everspin Technologies and Meta Materials.

Diversification Opportunities for Everspin Technologies and Meta Materials

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Everspin and Meta is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Everspin Technologies and Meta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Materials and Everspin Technologies 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 Everspin Technologies 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 Everspin Technologies i.e., Everspin Technologies and Meta Materials go up and down completely randomly.

Pair Corralation between Everspin Technologies and Meta Materials

Given the investment horizon of 90 days Everspin Technologies is expected to generate 0.49 times more return on investment than Meta Materials. However, Everspin Technologies is 2.04 times less risky than Meta Materials. It trades about 0.02 of its potential returns per unit of risk. Meta Materials is currently generating about -0.06 per unit of risk. If you would invest  771.00  in Everspin Technologies on December 30, 2023 and sell it today you would earn a total of  21.00  from holding Everspin Technologies or generate 2.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Everspin Technologies  vs.  Meta Materials

 Performance 
       Timeline  
Everspin Technologies 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Everspin Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
Meta Materials 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Meta Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Everspin Technologies and Meta Materials Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Everspin Technologies and Meta Materials

The main advantage of trading using opposite Everspin Technologies and Meta Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everspin Technologies 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 Everspin Technologies 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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