Correlation Between Bank of the and Metro Retail
Can any of the company-specific risk be diversified away by investing in both Bank of the and Metro Retail 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 Bank of the and Metro Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of the and Metro Retail Stores, you can compare the effects of market volatilities on Bank of the and Metro Retail 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 Bank of the with a short position of Metro Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of the and Metro Retail.
Diversification Opportunities for Bank of the and Metro Retail
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Metro is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bank of the and Metro Retail Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Retail Stores and Bank of the 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 Bank of the are associated (or correlated) with Metro Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Retail Stores has no effect on the direction of Bank of the i.e., Bank of the and Metro Retail go up and down completely randomly.
Pair Corralation between Bank of the and Metro Retail
Assuming the 90 days trading horizon Bank of the is expected to generate 0.89 times more return on investment than Metro Retail. However, Bank of the is 1.12 times less risky than Metro Retail. It trades about 0.05 of its potential returns per unit of risk. Metro Retail Stores is currently generating about 0.01 per unit of risk. If you would invest 9,332 in Bank of the on November 26, 2024 and sell it today you would earn a total of 3,718 from holding Bank of the or generate 39.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.67% |
Values | Daily Returns |
Bank of the vs. Metro Retail Stores
Performance |
Timeline |
Bank of the |
Metro Retail Stores |
Bank of the and Metro Retail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of the and Metro Retail
The main advantage of trading using opposite Bank of the and Metro Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of the position performs unexpectedly, Metro Retail 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 Metro Retail will offset losses from the drop in Metro Retail's long position.Bank of the vs. Atlas Consolidated Mining | ||
Bank of the vs. Semirara Mining Corp | ||
Bank of the vs. Century Pacific Food | ||
Bank of the vs. Swift Foods |
Metro Retail vs. Prime Media Holdings | ||
Metro Retail vs. Jollibee Foods Corp | ||
Metro Retail vs. Allhome Corp | ||
Metro Retail vs. Atlas Consolidated Mining |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |