Correlation Between MET and Cetus Protocol

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

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

Diversification Opportunities for MET and Cetus Protocol

-0.24

Correlation Coefficient

MET  Cetus Protocol

Very good diversification

The 3 months correlation between MET and Cetus is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding MET and Cetus Protocol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cetus Protocol and MET 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 MET are associated (or correlated) with Cetus Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cetus Protocol has no effect on the direction of MET i.e., MET and Cetus Protocol go up and down completely randomly.

Pair Corralation between MET and Cetus Protocol

Assuming the 90 days trading horizon MET is expected to under-perform the Cetus Protocol. But the crypto coin apears to be less risky and, when comparing its historical volatility, MET is 1.96 times less risky than Cetus Protocol. The crypto coin trades about -0.01 of its potential returns per unit of risk. The Cetus Protocol is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Cetus Protocol on March 7, 2025 and sell it today you would earn a total of  3.00  from holding Cetus Protocol or generate 30.0% return on investment over 90 days.

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

MET  vs.  Cetus Protocol

MET

Risk-Adjusted Performance

Very Weak

Over the last 90 days MET has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, MET is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Cetus Protocol

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cetus Protocol are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Cetus Protocol exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MET and Cetus Protocol

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

The idea behind MET and Cetus Protocol 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.

Check out your portfolio center.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.