Correlation Between Metropolitan Bank and Integrated Micro
Can any of the company-specific risk be diversified away by investing in both Metropolitan Bank and Integrated Micro 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 Integrated Micro 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 Integrated Micro Electronics, you can compare the effects of market volatilities on Metropolitan Bank and Integrated Micro 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 Integrated Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Bank and Integrated Micro.
Diversification Opportunities for Metropolitan Bank and Integrated Micro
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metropolitan and Integrated is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Bank Trust and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele 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 Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of Metropolitan Bank i.e., Metropolitan Bank and Integrated Micro go up and down completely randomly.
Pair Corralation between Metropolitan Bank and Integrated Micro
Assuming the 90 days trading horizon Metropolitan Bank Trust is expected to under-perform the Integrated Micro. But the stock apears to be less risky and, when comparing its historical volatility, Metropolitan Bank Trust is 3.27 times less risky than Integrated Micro. The stock trades about -0.31 of its potential returns per unit of risk. The Integrated Micro Electronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 147.00 in Integrated Micro Electronics on November 2, 2024 and sell it today you would earn a total of 3.00 from holding Integrated Micro Electronics or generate 2.04% 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. Integrated Micro Electronics
Performance |
| Timeline |
| Metropolitan Bank Trust |
| Integrated Micro Ele |
Metropolitan Bank and Integrated Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Bank and Integrated Micro
The main advantage of trading using opposite Metropolitan Bank and Integrated Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Bank position performs unexpectedly, Integrated Micro 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 Integrated Micro will offset losses from the drop in Integrated Micro's long position.| Metropolitan Bank vs. Philex Mining Corp | Metropolitan Bank vs. Atlas Consolidated Mining | Metropolitan Bank vs. Robinsons Retail Holdings | Metropolitan Bank vs. Lepanto Consolidated Mining |
| Integrated Micro vs. Converge Information Communications | Integrated Micro vs. Semirara Mining Corp | Integrated Micro vs. Prime Media Holdings | Integrated Micro vs. Transpacific Broadband Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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