Correlation Between Bunzl Plc and Metrospaces
Can any of the company-specific risk be diversified away by investing in both Bunzl Plc and Metrospaces 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 Bunzl Plc and Metrospaces into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bunzl plc and Metrospaces, you can compare the effects of market volatilities on Bunzl Plc and Metrospaces 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 Bunzl Plc with a short position of Metrospaces. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bunzl Plc and Metrospaces.
Diversification Opportunities for Bunzl Plc and Metrospaces
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bunzl and Metrospaces is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bunzl plc and Metrospaces in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metrospaces and Bunzl Plc 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 Bunzl plc are associated (or correlated) with Metrospaces. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metrospaces has no effect on the direction of Bunzl Plc i.e., Bunzl Plc and Metrospaces go up and down completely randomly.
Pair Corralation between Bunzl Plc and Metrospaces
Assuming the 90 days horizon Bunzl Plc is expected to generate 1270.05 times less return on investment than Metrospaces. But when comparing it to its historical volatility, Bunzl plc is 229.08 times less risky than Metrospaces. It trades about 0.05 of its potential returns per unit of risk. Metrospaces is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Metrospaces on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Metrospaces or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bunzl plc vs. Metrospaces
Performance |
| Timeline |
| Bunzl plc |
| Metrospaces |
Bunzl Plc and Metrospaces Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bunzl Plc and Metrospaces
The main advantage of trading using opposite Bunzl Plc and Metrospaces positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bunzl Plc position performs unexpectedly, Metrospaces 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 Metrospaces will offset losses from the drop in Metrospaces' long position.| Bunzl Plc vs. TOMI Environmental Solutions | Bunzl Plc vs. SCOR PK | Bunzl Plc vs. HUMANA INC | Bunzl Plc vs. Aquagold International |
| Metrospaces vs. CBRE Group Class | Metrospaces vs. CoStar Group | Metrospaces vs. Cellnex Telecom SA | Metrospaces vs. Cellnex Telecom SA |
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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