Correlation Between Metro AG and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both Metro AG and SBI Insurance 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 Metro AG and SBI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro AG and SBI Insurance Group, you can compare the effects of market volatilities on Metro AG and SBI Insurance 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 Metro AG with a short position of SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro AG and SBI Insurance.
Diversification Opportunities for Metro AG and SBI Insurance
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Metro and SBI is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Metro AG and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group and Metro AG 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 Metro AG are associated (or correlated) with SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of Metro AG i.e., Metro AG and SBI Insurance go up and down completely randomly.
Pair Corralation between Metro AG and SBI Insurance
Assuming the 90 days horizon Metro AG is expected to under-perform the SBI Insurance. In addition to that, Metro AG is 1.07 times more volatile than SBI Insurance Group. It trades about -0.07 of its total potential returns per unit of risk. SBI Insurance Group is currently generating about 0.0 per unit of volatility. If you would invest 710.00 in SBI Insurance Group on October 15, 2024 and sell it today you would lose (75.00) from holding SBI Insurance Group or give up 10.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro AG vs. SBI Insurance Group
Performance |
| Timeline |
| Metro AG |
| SBI Insurance Group |
Metro AG and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro AG and SBI Insurance
The main advantage of trading using opposite Metro AG and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro AG position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| Metro AG vs. CDN IMPERIAL BANK | Metro AG vs. Synovus Financial Corp | Metro AG vs. Webster Financial | Metro AG vs. United Insurance Holdings |
| SBI Insurance vs. Direct Line Insurance | SBI Insurance vs. Applied Materials | SBI Insurance vs. Reinsurance Group of | SBI Insurance vs. Goosehead Insurance |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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