Correlation Between DoubleDragon Properties and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both DoubleDragon Properties 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 DoubleDragon Properties and Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DoubleDragon Properties Corp and Metropolitan Bank Trust, you can compare the effects of market volatilities on DoubleDragon Properties 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 DoubleDragon Properties with a short position of Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DoubleDragon Properties and Metropolitan Bank.
Diversification Opportunities for DoubleDragon Properties and Metropolitan Bank
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DoubleDragon and Metropolitan is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding DoubleDragon Properties Corp 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 DoubleDragon Properties 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 DoubleDragon Properties Corp 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 DoubleDragon Properties i.e., DoubleDragon Properties and Metropolitan Bank go up and down completely randomly.
Pair Corralation between DoubleDragon Properties and Metropolitan Bank
Assuming the 90 days trading horizon DoubleDragon Properties is expected to generate 1.33 times less return on investment than Metropolitan Bank. But when comparing it to its historical volatility, DoubleDragon Properties Corp is 2.64 times less risky than Metropolitan Bank. It trades about 0.07 of its potential returns per unit of risk. Metropolitan Bank Trust is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,550 in Metropolitan Bank Trust on September 4, 2024 and sell it today you would earn a total of 80.00 from holding Metropolitan Bank Trust or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DoubleDragon Properties Corp vs. Metropolitan Bank Trust
Performance |
| Timeline |
| DoubleDragon Properties |
| Metropolitan Bank Trust |
DoubleDragon Properties and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DoubleDragon Properties and Metropolitan Bank
The main advantage of trading using opposite DoubleDragon Properties and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DoubleDragon Properties 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.| DoubleDragon Properties vs. Ayala Land | DoubleDragon Properties vs. Filinvest Development Coproration | DoubleDragon Properties vs. Vista Land and | DoubleDragon Properties vs. GT Capital Holdings |
| Metropolitan Bank vs. Security Bank Corp | Metropolitan Bank vs. Union Bank of | Metropolitan Bank vs. Philippine National Bank | Metropolitan Bank vs. Philippine Savings 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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