Correlation Between Dorian LPG and MetLife Preferred
Can any of the company-specific risk be diversified away by investing in both Dorian LPG and MetLife Preferred 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 Dorian LPG and MetLife Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dorian LPG and MetLife Preferred Stock, you can compare the effects of market volatilities on Dorian LPG and MetLife Preferred 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 Dorian LPG with a short position of MetLife Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dorian LPG and MetLife Preferred.
Diversification Opportunities for Dorian LPG and MetLife Preferred
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dorian and MetLife is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dorian LPG and MetLife Preferred Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife Preferred Stock and Dorian LPG 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 Dorian LPG are associated (or correlated) with MetLife Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife Preferred Stock has no effect on the direction of Dorian LPG i.e., Dorian LPG and MetLife Preferred go up and down completely randomly.
Pair Corralation between Dorian LPG and MetLife Preferred
Considering the 90-day investment horizon Dorian LPG is expected to under-perform the MetLife Preferred. In addition to that, Dorian LPG is 3.61 times more volatile than MetLife Preferred Stock. It trades about -0.27 of its total potential returns per unit of risk. MetLife Preferred Stock is currently generating about -0.02 per unit of volatility. If you would invest 2,453 in MetLife Preferred Stock on August 24, 2024 and sell it today you would lose (8.00) from holding MetLife Preferred Stock or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dorian LPG vs. MetLife Preferred Stock
Performance |
| Timeline |
| Dorian LPG |
| MetLife Preferred Stock |
Dorian LPG and MetLife Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dorian LPG and MetLife Preferred
The main advantage of trading using opposite Dorian LPG and MetLife Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dorian LPG position performs unexpectedly, MetLife Preferred 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 Preferred will offset losses from the drop in MetLife Preferred's long position.| Dorian LPG vs. DHT Holdings | Dorian LPG vs. Teekay | Dorian LPG vs. HUMANA INC | Dorian LPG vs. Aquagold International |
| MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. MetLife Preferred Stock | MetLife Preferred vs. Brighthouse 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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