Correlation Between Metropolitan Bank and San Miguel
Can any of the company-specific risk be diversified away by investing in both Metropolitan Bank and San Miguel 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 San Miguel 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 San Miguel Pure, you can compare the effects of market volatilities on Metropolitan Bank and San Miguel 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 San Miguel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Bank and San Miguel.
Diversification Opportunities for Metropolitan Bank and San Miguel
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Metropolitan and San is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Bank Trust and San Miguel Pure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Miguel Pure 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 San Miguel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Miguel Pure has no effect on the direction of Metropolitan Bank i.e., Metropolitan Bank and San Miguel go up and down completely randomly.
Pair Corralation between Metropolitan Bank and San Miguel
Assuming the 90 days trading horizon Metropolitan Bank is expected to generate 2.78 times less return on investment than San Miguel. In addition to that, Metropolitan Bank is 1.24 times more volatile than San Miguel Pure. It trades about 0.02 of its total potential returns per unit of risk. San Miguel Pure is currently generating about 0.06 per unit of volatility. If you would invest 5,198 in San Miguel Pure on September 1, 2024 and sell it today you would earn a total of 102.00 from holding San Miguel Pure or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Metropolitan Bank Trust vs. San Miguel Pure
Performance |
| Timeline |
| Metropolitan Bank Trust |
| San Miguel Pure |
Metropolitan Bank and San Miguel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Bank and San Miguel
The main advantage of trading using opposite Metropolitan Bank and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Bank position performs unexpectedly, San Miguel 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 San Miguel will offset losses from the drop in San Miguel's long position.| Metropolitan Bank vs. Allhome Corp | Metropolitan Bank vs. Philippine Business Bank | Metropolitan Bank vs. Philex Mining Corp | Metropolitan Bank vs. Apex Mining Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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