Correlation Between Metro AG and PF Bakkafrost
Can any of the company-specific risk be diversified away by investing in both Metro AG and PF Bakkafrost 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 PF Bakkafrost into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro AG and PF Bakkafrost, you can compare the effects of market volatilities on Metro AG and PF Bakkafrost 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 PF Bakkafrost. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro AG and PF Bakkafrost.
Diversification Opportunities for Metro AG and PF Bakkafrost
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metro and 6BF is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Metro AG and PF Bakkafrost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PF Bakkafrost 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 PF Bakkafrost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PF Bakkafrost has no effect on the direction of Metro AG i.e., Metro AG and PF Bakkafrost go up and down completely randomly.
Pair Corralation between Metro AG and PF Bakkafrost
Assuming the 90 days trading horizon Metro AG is expected to under-perform the PF Bakkafrost. In addition to that, Metro AG is 1.0 times more volatile than PF Bakkafrost. It trades about -0.01 of its total potential returns per unit of risk. PF Bakkafrost is currently generating about 0.08 per unit of volatility. If you would invest 5,455 in PF Bakkafrost on September 19, 2024 and sell it today you would earn a total of 155.00 from holding PF Bakkafrost or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro AG vs. PF Bakkafrost
Performance |
| Timeline |
| Metro AG |
| PF Bakkafrost |
Metro AG and PF Bakkafrost Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro AG and PF Bakkafrost
The main advantage of trading using opposite Metro AG and PF Bakkafrost positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro AG position performs unexpectedly, PF Bakkafrost 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 PF Bakkafrost will offset losses from the drop in PF Bakkafrost's long position.| Metro AG vs. TYSON FOODS A | Metro AG vs. JJ SNACK FOODS | Metro AG vs. National Beverage Corp | Metro AG vs. Entravision Communications |
| PF Bakkafrost vs. Metro AG | PF Bakkafrost vs. Superior Plus Corp | PF Bakkafrost vs. SIVERS SEMICONDUCTORS AB | PF Bakkafrost vs. NorAm Drilling AS |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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