Correlation Between First Abacus and Metro Retail
Can any of the company-specific risk be diversified away by investing in both First Abacus and Metro Retail 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 First Abacus and Metro Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Abacus Financial and Metro Retail Stores, you can compare the effects of market volatilities on First Abacus and Metro Retail 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 First Abacus with a short position of Metro Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Abacus and Metro Retail.
Diversification Opportunities for First Abacus and Metro Retail
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between First and Metro is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding First Abacus Financial and Metro Retail Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Retail Stores and First Abacus 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 First Abacus Financial are associated (or correlated) with Metro Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Retail Stores has no effect on the direction of First Abacus i.e., First Abacus and Metro Retail go up and down completely randomly.
Pair Corralation between First Abacus and Metro Retail
Assuming the 90 days trading horizon First Abacus Financial is expected to under-perform the Metro Retail. In addition to that, First Abacus is 10.54 times more volatile than Metro Retail Stores. It trades about -0.06 of its total potential returns per unit of risk. Metro Retail Stores is currently generating about -0.06 per unit of volatility. If you would invest 121.00 in Metro Retail Stores on September 30, 2024 and sell it today you would lose (1.00) from holding Metro Retail Stores or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 45.0% |
| Values | Daily Returns |
First Abacus Financial vs. Metro Retail Stores
Performance |
| Timeline |
| First Abacus Financial |
| Metro Retail Stores |
First Abacus and Metro Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Abacus and Metro Retail
The main advantage of trading using opposite First Abacus and Metro Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Abacus position performs unexpectedly, Metro Retail 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 Metro Retail will offset losses from the drop in Metro Retail's long position.| First Abacus vs. VistaREIT | First Abacus vs. Bright Kindle Resources | First Abacus vs. Metro Retail Stores | First Abacus vs. Axelum Resources Corp |
| Metro Retail vs. DoubleDragon Properties Corp | Metro Retail vs. Transpacific Broadband Group | Metro Retail vs. VistaREIT | Metro Retail vs. Axelum Resources Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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