Correlation Between Metropolitan Bank and Alliance Select
Can any of the company-specific risk be diversified away by investing in both Metropolitan Bank and Alliance Select 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 Alliance Select 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 Alliance Select Foods, you can compare the effects of market volatilities on Metropolitan Bank and Alliance Select 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 Alliance Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Bank and Alliance Select.
Diversification Opportunities for Metropolitan Bank and Alliance Select
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metropolitan and Alliance is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Bank Trust and Alliance Select Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Select Foods 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 Alliance Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Select Foods has no effect on the direction of Metropolitan Bank i.e., Metropolitan Bank and Alliance Select go up and down completely randomly.
Pair Corralation between Metropolitan Bank and Alliance Select
Assuming the 90 days trading horizon Metropolitan Bank Trust is expected to generate 0.32 times more return on investment than Alliance Select. However, Metropolitan Bank Trust is 3.16 times less risky than Alliance Select. It trades about 0.11 of its potential returns per unit of risk. Alliance Select Foods is currently generating about 0.0 per unit of risk. If you would invest 4,920 in Metropolitan Bank Trust on August 29, 2024 and sell it today you would earn a total of 2,845 from holding Metropolitan Bank Trust or generate 57.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 44.63% |
| Values | Daily Returns |
Metropolitan Bank Trust vs. Alliance Select Foods
Performance |
| Timeline |
| Metropolitan Bank Trust |
| Alliance Select Foods |
Metropolitan Bank and Alliance Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Bank and Alliance Select
The main advantage of trading using opposite Metropolitan Bank and Alliance Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Bank position performs unexpectedly, Alliance Select 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 Alliance Select will offset losses from the drop in Alliance Select's 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 |
| Alliance Select vs. Allhome Corp | Alliance Select vs. Jollibee Foods Corp | Alliance Select vs. LFM Properties Corp | Alliance Select vs. Altus Property Ventures |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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