Correlation Between Asia United and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both Asia United and Metropolitan Bank 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 Asia United and Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia United Bank and Metropolitan Bank Trust, you can compare the effects of market volatilities on Asia United and Metropolitan Bank 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 Asia United with a short position of Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia United and Metropolitan Bank.
Diversification Opportunities for Asia United and Metropolitan Bank
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asia and Metropolitan is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Asia United Bank and Metropolitan Bank Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Bank Trust and Asia United 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 Asia United Bank are associated (or correlated) with Metropolitan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Bank Trust has no effect on the direction of Asia United i.e., Asia United and Metropolitan Bank go up and down completely randomly.
Pair Corralation between Asia United and Metropolitan Bank
Assuming the 90 days trading horizon Asia United Bank is expected to generate 0.98 times more return on investment than Metropolitan Bank. However, Asia United Bank is 1.02 times less risky than Metropolitan Bank. It trades about 0.61 of its potential returns per unit of risk. Metropolitan Bank Trust is currently generating about -0.13 per unit of risk. If you would invest 6,100 in Asia United Bank on October 21, 2024 and sell it today you would earn a total of 1,100 from holding Asia United Bank or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia United Bank vs. Metropolitan Bank Trust
Performance |
| Timeline |
| Asia United Bank |
| Metropolitan Bank Trust |
Asia United and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia United and Metropolitan Bank
The main advantage of trading using opposite Asia United and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia United position performs unexpectedly, Metropolitan Bank 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 Metropolitan Bank will offset losses from the drop in Metropolitan Bank's long position.| Asia United vs. National Reinsurance | Asia United vs. Converge Information Communications | Asia United vs. Security Bank Corp | Asia United vs. Suntrust Home Developers |
| Metropolitan Bank vs. Asia United Bank | Metropolitan Bank vs. Manila Mining Corp | Metropolitan Bank vs. Metro Retail Stores | Metropolitan Bank vs. House of Investments |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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