Correlation Between Metro AG and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both Metro AG and BANK HANDLOWY 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 BANK HANDLOWY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro AG and BANK HANDLOWY, you can compare the effects of market volatilities on Metro AG and BANK HANDLOWY 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 BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro AG and BANK HANDLOWY.
Diversification Opportunities for Metro AG and BANK HANDLOWY
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Metro and BANK is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Metro AG and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY 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 BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of Metro AG i.e., Metro AG and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between Metro AG and BANK HANDLOWY
Assuming the 90 days trading horizon Metro AG is expected to under-perform the BANK HANDLOWY. In addition to that, Metro AG is 1.02 times more volatile than BANK HANDLOWY. It trades about 0.0 of its total potential returns per unit of risk. BANK HANDLOWY is currently generating about 0.07 per unit of volatility. If you would invest 965.00 in BANK HANDLOWY on September 19, 2024 and sell it today you would earn a total of 1,185 from holding BANK HANDLOWY or generate 122.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro AG vs. BANK HANDLOWY
Performance |
| Timeline |
| Metro AG |
| BANK HANDLOWY |
Metro AG and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro AG and BANK HANDLOWY
The main advantage of trading using opposite Metro AG and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro AG position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY'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 |
| BANK HANDLOWY vs. Nok Airlines PCL | BANK HANDLOWY vs. SOUTHWEST AIRLINES | BANK HANDLOWY vs. Sumitomo Mitsui Construction | BANK HANDLOWY vs. Nufarm Limited |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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