Correlation Between FG Annuities and MetLife
Can any of the company-specific risk be diversified away by investing in both FG Annuities and MetLife 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 FG Annuities and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FG Annuities Life and MetLife, you can compare the effects of market volatilities on FG Annuities and MetLife 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 FG Annuities with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Annuities and MetLife.
Diversification Opportunities for FG Annuities and MetLife
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FG Annuities and MetLife is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding FG Annuities Life and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and FG Annuities 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 FG Annuities Life are associated (or correlated) with MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of FG Annuities i.e., FG Annuities and MetLife go up and down completely randomly.
Pair Corralation between FG Annuities and MetLife
Allowing for the 90-day total investment horizon FG Annuities Life is expected to generate 1.8 times more return on investment than MetLife. However, FG Annuities is 1.8 times more volatile than MetLife. It trades about 0.13 of its potential returns per unit of risk. MetLife is currently generating about 0.08 per unit of risk. If you would invest 4,264 in FG Annuities Life on August 24, 2024 and sell it today you would earn a total of 446.00 from holding FG Annuities Life or generate 10.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FG Annuities Life vs. MetLife
Performance |
| Timeline |
| FG Annuities Life |
| MetLife |
FG Annuities and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FG Annuities and MetLife
The main advantage of trading using opposite FG Annuities and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Annuities position performs unexpectedly, MetLife 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 will offset losses from the drop in MetLife's long position.| FG Annuities vs. Manulife Financial Corp | FG Annuities vs. Brighthouse Financial | FG Annuities vs. Jackson Financial |
| MetLife vs. Manulife Financial Corp | MetLife vs. Brighthouse Financial | MetLife vs. FG Annuities Life | MetLife vs. Jackson Financial |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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