Correlation Between Centene Corp and MetLife Preferred
Can any of the company-specific risk be diversified away by investing in both Centene Corp and MetLife Preferred 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 Centene Corp and MetLife Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centene Corp and MetLife Preferred Stock, you can compare the effects of market volatilities on Centene Corp and MetLife Preferred 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 Centene Corp with a short position of MetLife Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centene Corp and MetLife Preferred.
Diversification Opportunities for Centene Corp and MetLife Preferred
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centene and MetLife is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Centene Corp and MetLife Preferred Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife Preferred Stock and Centene Corp 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 Centene Corp are associated (or correlated) with MetLife Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife Preferred Stock has no effect on the direction of Centene Corp i.e., Centene Corp and MetLife Preferred go up and down completely randomly.
Pair Corralation between Centene Corp and MetLife Preferred
Considering the 90-day investment horizon Centene Corp is expected to under-perform the MetLife Preferred. In addition to that, Centene Corp is 1.91 times more volatile than MetLife Preferred Stock. It trades about -0.01 of its total potential returns per unit of risk. MetLife Preferred Stock is currently generating about 0.02 per unit of volatility. If you would invest 1,989 in MetLife Preferred Stock on September 1, 2024 and sell it today you would earn a total of 115.00 from holding MetLife Preferred Stock or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centene Corp vs. MetLife Preferred Stock
Performance |
| Timeline |
| Centene Corp |
| MetLife Preferred Stock |
Centene Corp and MetLife Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centene Corp and MetLife Preferred
The main advantage of trading using opposite Centene Corp and MetLife Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centene Corp position performs unexpectedly, MetLife Preferred 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 MetLife Preferred will offset losses from the drop in MetLife Preferred's long position.| Centene Corp vs. Humana Inc | Centene Corp vs. Elevance Health | Centene Corp vs. UnitedHealth Group Incorporated | Centene Corp vs. CVS Health Corp |
| MetLife Preferred vs. MetLife Preferred Stock | MetLife Preferred vs. The Allstate | MetLife Preferred vs. The Allstate | MetLife Preferred vs. Wells Fargo |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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