Correlation Between Century Pacific and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both Century Pacific and Metropolitan Bank 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 Century Pacific and Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Pacific Food and Metropolitan Bank Trust, you can compare the effects of market volatilities on Century Pacific and Metropolitan Bank 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 Century Pacific with a short position of Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Pacific and Metropolitan Bank.
Diversification Opportunities for Century Pacific and Metropolitan Bank
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Century and Metropolitan is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Century Pacific Food and Metropolitan Bank Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Bank Trust and Century Pacific 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 Century Pacific Food are associated (or correlated) with Metropolitan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Bank Trust has no effect on the direction of Century Pacific i.e., Century Pacific and Metropolitan Bank go up and down completely randomly.
Pair Corralation between Century Pacific and Metropolitan Bank
Assuming the 90 days trading horizon Century Pacific is expected to generate 1.2 times less return on investment than Metropolitan Bank. In addition to that, Century Pacific is 1.1 times more volatile than Metropolitan Bank Trust. It trades about 0.06 of its total potential returns per unit of risk. Metropolitan Bank Trust is currently generating about 0.08 per unit of volatility. If you would invest 5,924 in Metropolitan Bank Trust on August 25, 2024 and sell it today you would earn a total of 1,726 from holding Metropolitan Bank Trust or generate 29.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Pacific Food vs. Metropolitan Bank Trust
Performance |
| Timeline |
| Century Pacific Food |
| Metropolitan Bank Trust |
Century Pacific and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Pacific and Metropolitan Bank
The main advantage of trading using opposite Century Pacific and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Pacific position performs unexpectedly, Metropolitan Bank 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 Metropolitan Bank will offset losses from the drop in Metropolitan Bank's long position.| Century Pacific vs. RFM Corp | Century Pacific vs. Axelum Resources Corp | Century Pacific vs. Swift Foods |
| Metropolitan Bank vs. SM Investments Corp | Metropolitan Bank vs. Converge Information Communications | Metropolitan Bank vs. Union Bank of | Metropolitan Bank vs. Pacificonline Systems |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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