Correlation Between Metropolitan Bank and AgriNurture
Can any of the company-specific risk be diversified away by investing in both Metropolitan Bank and AgriNurture 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 Metropolitan Bank and AgriNurture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan Bank Trust and AgriNurture, you can compare the effects of market volatilities on Metropolitan Bank and AgriNurture 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 Metropolitan Bank with a short position of AgriNurture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Bank and AgriNurture.
Diversification Opportunities for Metropolitan Bank and AgriNurture
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metropolitan and AgriNurture is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Bank Trust and AgriNurture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriNurture and Metropolitan Bank 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 Metropolitan Bank Trust are associated (or correlated) with AgriNurture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriNurture has no effect on the direction of Metropolitan Bank i.e., Metropolitan Bank and AgriNurture go up and down completely randomly.
Pair Corralation between Metropolitan Bank and AgriNurture
Assuming the 90 days trading horizon Metropolitan Bank Trust is expected to generate 0.44 times more return on investment than AgriNurture. However, Metropolitan Bank Trust is 2.3 times less risky than AgriNurture. It trades about 0.06 of its potential returns per unit of risk. AgriNurture is currently generating about -0.15 per unit of risk. If you would invest 5,560 in Metropolitan Bank Trust on August 26, 2024 and sell it today you would earn a total of 2,090 from holding Metropolitan Bank Trust or generate 37.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan Bank Trust vs. AgriNurture
Performance |
| Timeline |
| Metropolitan Bank Trust |
| AgriNurture |
Metropolitan Bank and AgriNurture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Bank and AgriNurture
The main advantage of trading using opposite Metropolitan Bank and AgriNurture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Bank position performs unexpectedly, AgriNurture 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 AgriNurture will offset losses from the drop in AgriNurture's long position.| Metropolitan Bank vs. SM Investments Corp | Metropolitan Bank vs. Converge Information Communications | Metropolitan Bank vs. Union Bank of | Metropolitan Bank vs. Pacificonline Systems |
| AgriNurture vs. Balai Ni Fruitas | AgriNurture vs. Allhome Corp | AgriNurture vs. Jollibee Foods Corp | AgriNurture vs. LFM Properties 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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