Correlation Between Metropolitan Bank and Axelum Resources
Can any of the company-specific risk be diversified away by investing in both Metropolitan Bank and Axelum Resources 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 Axelum Resources 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 Axelum Resources Corp, you can compare the effects of market volatilities on Metropolitan Bank and Axelum Resources 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 Axelum Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Bank and Axelum Resources.
Diversification Opportunities for Metropolitan Bank and Axelum Resources
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metropolitan and Axelum is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Bank Trust and Axelum Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axelum Resources Corp 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 Axelum Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axelum Resources Corp has no effect on the direction of Metropolitan Bank i.e., Metropolitan Bank and Axelum Resources go up and down completely randomly.
Pair Corralation between Metropolitan Bank and Axelum Resources
Assuming the 90 days trading horizon Metropolitan Bank Trust is expected to generate 0.71 times more return on investment than Axelum Resources. However, Metropolitan Bank Trust is 1.4 times less risky than Axelum Resources. It trades about 0.11 of its potential returns per unit of risk. Axelum Resources Corp is currently generating about -0.03 per unit of risk. If you would invest 6,079 in Metropolitan Bank Trust on August 29, 2024 and sell it today you would earn a total of 1,621 from holding Metropolitan Bank Trust or generate 26.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.75% |
| Values | Daily Returns |
Metropolitan Bank Trust vs. Axelum Resources Corp
Performance |
| Timeline |
| Metropolitan Bank Trust |
| Axelum Resources Corp |
Metropolitan Bank and Axelum Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Bank and Axelum Resources
The main advantage of trading using opposite Metropolitan Bank and Axelum Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Bank position performs unexpectedly, Axelum Resources 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 Axelum Resources will offset losses from the drop in Axelum Resources' long position.| Metropolitan Bank vs. Crown Asia Chemicals | Metropolitan Bank vs. Jollibee Foods Corp | Metropolitan Bank vs. Security Bank Corp | Metropolitan Bank vs. Semirara Mining Corp |
| Axelum Resources vs. Swift Foods | Axelum Resources vs. Allhome Corp | Axelum Resources vs. Jollibee Foods Corp | Axelum Resources 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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