Correlation Between Oeneo SA and MetLife

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

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

Diversification Opportunities for Oeneo SA and MetLife

-0.73

Correlation Coefficient

Oeneo SA  MetLife

Pay attention - limited upside

The 3 months correlation between Oeneo and MetLife is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Oeneo SA and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Oeneo SA 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 Oeneo SA 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 Oeneo SA i.e., Oeneo SA and MetLife go up and down completely randomly.

Pair Corralation between Oeneo SA and MetLife

Assuming the 90 days trading horizon Oeneo SA is expected to generate 1.25 times more return on investment than MetLife. However, Oeneo SA is 1.25 times more volatile than MetLife. It trades about -0.11 of its potential returns per unit of risk. MetLife is currently generating about -0.14 per unit of risk. If you would invest  1,060  in Oeneo SA on February 1, 2024 and sell it today you would lose (35.00) from holding Oeneo SA or give up 3.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Oeneo SA  vs.  MetLife

Oeneo SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oeneo SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

MetLife

Risk-Adjusted Performance

12 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MetLife are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, MetLife may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Oeneo SA and MetLife

The main advantage of trading using opposite Oeneo SA and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oeneo SA 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.

The idea behind Oeneo SA and MetLife 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.