Correlation Between General Shopping and MetLife
Can any of the company-specific risk be diversified away by investing in both General Shopping 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 General Shopping and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Shopping e and MetLife, you can compare the effects of market volatilities on General Shopping 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 General Shopping with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Shopping and MetLife.
Diversification Opportunities for General Shopping and MetLife
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between General and MetLife is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding General Shopping e and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and General Shopping 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 General Shopping e 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 General Shopping i.e., General Shopping and MetLife go up and down completely randomly.
Pair Corralation between General Shopping and MetLife
Assuming the 90 days trading horizon General Shopping e is expected to under-perform the MetLife. In addition to that, General Shopping is 1.7 times more volatile than MetLife. It trades about -0.26 of its total potential returns per unit of risk. MetLife is currently generating about 0.15 per unit of volatility. If you would invest 33,396 in MetLife on February 1, 2024 and sell it today you would earn a total of 2,684 from holding MetLife or generate 8.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
General Shopping e vs. MetLife
Performance |
Timeline |
General Shopping e |
MetLife |
General Shopping and MetLife Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with General Shopping and MetLife
The main advantage of trading using opposite General Shopping and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Shopping position performs unexpectedly, MetLife 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 MetLife will offset losses from the drop in MetLife's long position.General Shopping vs. Charter Communications | General Shopping vs. Zoom Video Communications | General Shopping vs. United Rentals | General Shopping vs. Iron Mountain Incorporated |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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