Correlation Between Romanian Traded and MetLife

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

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

Diversification Opportunities for Romanian Traded and MetLife

-0.06
  Correlation Coefficient
Romanian Traded Index
MetLife

Good diversification

The 3 months correlation between Romanian and MetLife is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Romanian Traded Index In RON and MetLife Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Romanian Traded 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 Romanian Traded Index are associated (or correlated) with MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of Romanian Traded i.e. Romanian Traded and MetLife go up and down completely randomly.

Pair Corralation between Romanian Traded and MetLife

Assuming the 30 trading days horizon, Romanian Traded Index is expected to generate 75.0 times more return on investment than MetLife. However, Romanian Traded is 75.0 times more volatile than MetLife. It trades about 0.25 of its potential returns per unit of risk. MetLife is currently generating about 0.05 per unit of risk. If you would invest  3,140  in Romanian Traded Index on June 12, 2020 and sell it today you would earn a total of  1,744,631  from holding Romanian Traded Index or generate 55561.5% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy84.62%
ValuesDaily Returns

Romanian Traded Index In RON  vs.  MetLife Inc

 Performance (%) 
      Timeline 
Romanian Traded Index 
1717

Romanian Traded Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Romanian Traded Index are ranked lower than 17 (%) of all global equities and portfolios over the last 30 days. Despite nearly weak fundamental indicators, Romanian Traded layed out solid returns over the last few months and may actually be approaching a breakup point.
MetLife 
33

MetLife Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in MetLife are ranked lower than 3 (%) of all global equities and portfolios over the last 30 days. In spite of comparatively sluggish essential indicators, MetLife may actually be approaching a critical reversion point that can send shares even higher in August 2020.

Romanian Traded and MetLife Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.


 
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