Correlation Between Intuitive Investments and Metro Bank
Can any of the company-specific risk be diversified away by investing in both Intuitive Investments and Metro 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 Intuitive Investments and Metro Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Investments Group and Metro Bank PLC, you can compare the effects of market volatilities on Intuitive Investments and Metro 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 Intuitive Investments with a short position of Metro Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Investments and Metro Bank.
Diversification Opportunities for Intuitive Investments and Metro Bank
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intuitive and Metro is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group and Metro Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Bank PLC and Intuitive Investments 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 Intuitive Investments Group are associated (or correlated) with Metro Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Bank PLC has no effect on the direction of Intuitive Investments i.e., Intuitive Investments and Metro Bank go up and down completely randomly.
Pair Corralation between Intuitive Investments and Metro Bank
Assuming the 90 days trading horizon Intuitive Investments Group is expected to generate 1.71 times more return on investment than Metro Bank. However, Intuitive Investments is 1.71 times more volatile than Metro Bank PLC. It trades about 0.17 of its potential returns per unit of risk. Metro Bank PLC is currently generating about -0.07 per unit of risk. If you would invest 11,050 in Intuitive Investments Group on October 25, 2024 and sell it today you would earn a total of 1,350 from holding Intuitive Investments Group or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Investments Group vs. Metro Bank PLC
Performance |
| Timeline |
| Intuitive Investments |
| Metro Bank PLC |
Intuitive Investments and Metro Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Investments and Metro Bank
The main advantage of trading using opposite Intuitive Investments and Metro Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Investments position performs unexpectedly, Metro 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 Metro Bank will offset losses from the drop in Metro Bank's long position.| Intuitive Investments vs. Games Workshop Group | Intuitive Investments vs. Auto Trader Group | Intuitive Investments vs. Coor Service Management | Intuitive Investments vs. iShares Dow Jones |
| Metro Bank vs. Livermore Investments Group | Metro Bank vs. Applied Materials | Metro Bank vs. Chrysalis Investments | Metro Bank vs. Nordic Semiconductor ASA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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