Correlation Between Cosco Capital and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both Cosco Capital 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 Cosco Capital and Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosco Capital and Metropolitan Bank Trust, you can compare the effects of market volatilities on Cosco Capital 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 Cosco Capital with a short position of Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosco Capital and Metropolitan Bank.
Diversification Opportunities for Cosco Capital and Metropolitan Bank
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cosco and Metropolitan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cosco Capital 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 Cosco Capital 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 Cosco Capital 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 Cosco Capital i.e., Cosco Capital and Metropolitan Bank go up and down completely randomly.
Pair Corralation between Cosco Capital and Metropolitan Bank
Assuming the 90 days trading horizon Cosco Capital is expected to under-perform the Metropolitan Bank. But the stock apears to be less risky and, when comparing its historical volatility, Cosco Capital is 1.21 times less risky than Metropolitan Bank. The stock trades about 0.0 of its potential returns per unit of risk. The Metropolitan Bank Trust is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,525 in Metropolitan Bank Trust on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Metropolitan Bank Trust or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosco Capital vs. Metropolitan Bank Trust
Performance |
| Timeline |
| Cosco Capital |
| Metropolitan Bank Trust |
Cosco Capital and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosco Capital and Metropolitan Bank
The main advantage of trading using opposite Cosco Capital and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosco Capital 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.| Cosco Capital vs. Century Pacific Food | Cosco Capital vs. BDO Unibank | Cosco Capital vs. East West Banking | Cosco Capital vs. Top Frontier Investment |
| Metropolitan Bank vs. BDO Unibank | Metropolitan Bank vs. Security Bank Corp | Metropolitan Bank vs. Union Bank of | Metropolitan Bank vs. Philippine National Bank |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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