Correlation Between Allhome Corp and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both Allhome Corp 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 Allhome Corp and Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allhome Corp and Metropolitan Bank Trust, you can compare the effects of market volatilities on Allhome Corp 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 Allhome Corp with a short position of Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allhome Corp and Metropolitan Bank.
Diversification Opportunities for Allhome Corp and Metropolitan Bank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allhome and Metropolitan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Allhome 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 Allhome Corp 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 Allhome 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 Allhome Corp i.e., Allhome Corp and Metropolitan Bank go up and down completely randomly.
Pair Corralation between Allhome Corp and Metropolitan Bank
Assuming the 90 days trading horizon Allhome Corp is expected to under-perform the Metropolitan Bank. But the stock apears to be less risky and, when comparing its historical volatility, Allhome Corp is 1.05 times less risky than Metropolitan Bank. The stock trades about -0.04 of its potential returns per unit of risk. The Metropolitan Bank Trust is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 7,870 in Metropolitan Bank Trust on August 29, 2024 and sell it today you would lose (105.00) from holding Metropolitan Bank Trust or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allhome Corp vs. Metropolitan Bank Trust
Performance |
| Timeline |
| Allhome Corp |
| Metropolitan Bank Trust |
Allhome Corp and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allhome Corp and Metropolitan Bank
The main advantage of trading using opposite Allhome Corp and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allhome Corp 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.| Allhome Corp vs. Metropolitan Bank Trust | Allhome Corp vs. Asia United Bank | Allhome Corp vs. BDO Unibank | Allhome Corp vs. Integrated Micro Electronics |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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