Correlation Between MET and Kava

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

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

Diversification Opportunities for MET and Kava

0.0

Correlation Coefficient

MET  Kava

Pay attention - limited upside

The 3 months correlation between MET and Kava is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MET and Kava in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kava 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 Kava. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kava has no effect on the direction of MET i.e., MET and Kava go up and down completely randomly.

Pair Corralation between MET and Kava

If you would invest  15.00  in MET on May 6, 2025 and sell it today you would earn a total of  0.00  from holding MET or generate 0.0% return on investment over 90 days.

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

MET  vs.  Kava

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.

Kava

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kava has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Kava shareholders.

Pair Trading with MET and Kava

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

The idea behind MET and Kava 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.