Correlation Between Jiangsu Expressway and MetLife
Can any of the company-specific risk be diversified away by investing in both Jiangsu Expressway 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 Jiangsu Expressway and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jiangsu Expressway and MetLife, you can compare the effects of market volatilities on Jiangsu Expressway 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 Jiangsu Expressway with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Expressway and MetLife.
Diversification Opportunities for Jiangsu Expressway and MetLife
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jiangsu and MetLife is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Expressway and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Jiangsu Expressway 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 Jiangsu Expressway 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 Jiangsu Expressway i.e., Jiangsu Expressway and MetLife go up and down completely randomly.
Pair Corralation between Jiangsu Expressway and MetLife
Assuming the 90 days horizon Jiangsu Expressway is expected to generate 3.17 times more return on investment than MetLife. However, Jiangsu Expressway is 3.17 times more volatile than MetLife. It trades about 0.04 of its potential returns per unit of risk. MetLife is currently generating about 0.0 per unit of risk. If you would invest 110.00 in Jiangsu Expressway on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Jiangsu Expressway or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jiangsu Expressway vs. MetLife
Performance |
| Timeline |
| Jiangsu Expressway |
| MetLife |
Jiangsu Expressway and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Expressway and MetLife
The main advantage of trading using opposite Jiangsu Expressway and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Expressway 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.| Jiangsu Expressway vs. Recursion Pharmaceuticals | Jiangsu Expressway vs. SoFi Technologies | Jiangsu Expressway vs. PayPal Holdings | Jiangsu Expressway vs. Intuitive Machines |
| MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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