Correlation Between Metropolitan Bank and GT Capital
Can any of the company-specific risk be diversified away by investing in both Metropolitan Bank and GT Capital 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 GT Capital 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 GT Capital Holdings, you can compare the effects of market volatilities on Metropolitan Bank and GT Capital 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 GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Bank and GT Capital.
Diversification Opportunities for Metropolitan Bank and GT Capital
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Metropolitan and GTCAP is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Bank Trust and GT Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GT Capital Holdings 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 GT Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GT Capital Holdings has no effect on the direction of Metropolitan Bank i.e., Metropolitan Bank and GT Capital go up and down completely randomly.
Pair Corralation between Metropolitan Bank and GT Capital
Assuming the 90 days trading horizon Metropolitan Bank Trust is expected to generate 0.59 times more return on investment than GT Capital. However, Metropolitan Bank Trust is 1.7 times less risky than GT Capital. It trades about -0.26 of its potential returns per unit of risk. GT Capital Holdings is currently generating about -0.68 per unit of risk. If you would invest 7,370 in Metropolitan Bank Trust on November 3, 2024 and sell it today you would lose (440.00) from holding Metropolitan Bank Trust or give up 5.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan Bank Trust vs. GT Capital Holdings
Performance |
| Timeline |
| Metropolitan Bank Trust |
| GT Capital Holdings |
Metropolitan Bank and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Bank and GT Capital
The main advantage of trading using opposite Metropolitan Bank and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Bank position performs unexpectedly, GT Capital 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 GT Capital will offset losses from the drop in GT Capital's long position.| Metropolitan Bank vs. Apex Mining Co | Metropolitan Bank vs. SM Investments Corp | Metropolitan Bank vs. Semirara Mining Corp | Metropolitan Bank vs. Lepanto Consolidated Mining |
| GT Capital vs. Asia United Bank | GT Capital vs. Apex Mining Co | GT Capital vs. Philex Mining Corp | GT Capital vs. Lepanto Consolidated Mining |
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 CEOs Directory module to screen CEOs from public companies around the world.
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