Correlation Between Metropolitan Bank and Liberty Flour
Can any of the company-specific risk be diversified away by investing in both Metropolitan Bank and Liberty Flour 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 Liberty Flour 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 Liberty Flour Mills, you can compare the effects of market volatilities on Metropolitan Bank and Liberty Flour 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 Liberty Flour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Bank and Liberty Flour.
Diversification Opportunities for Metropolitan Bank and Liberty Flour
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Metropolitan and Liberty is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Bank Trust and Liberty Flour Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Flour Mills 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 Liberty Flour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Flour Mills has no effect on the direction of Metropolitan Bank i.e., Metropolitan Bank and Liberty Flour go up and down completely randomly.
Pair Corralation between Metropolitan Bank and Liberty Flour
Assuming the 90 days trading horizon Metropolitan Bank Trust is expected to generate 0.27 times more return on investment than Liberty Flour. However, Metropolitan Bank Trust is 3.73 times less risky than Liberty Flour. It trades about 0.09 of its potential returns per unit of risk. Liberty Flour Mills is currently generating about 0.02 per unit of risk. If you would invest 4,925 in Metropolitan Bank Trust on September 14, 2024 and sell it today you would earn a total of 2,470 from holding Metropolitan Bank Trust or generate 50.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 48.09% |
| Values | Daily Returns |
Metropolitan Bank Trust vs. Liberty Flour Mills
Performance |
| Timeline |
| Metropolitan Bank Trust |
| Liberty Flour Mills |
Metropolitan Bank and Liberty Flour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Bank and Liberty Flour
The main advantage of trading using opposite Metropolitan Bank and Liberty Flour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Bank position performs unexpectedly, Liberty Flour 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 Liberty Flour will offset losses from the drop in Liberty Flour's long position.| Metropolitan Bank vs. BDO Unibank | Metropolitan Bank vs. Security Bank Corp | Metropolitan Bank vs. Union Bank of | Metropolitan Bank vs. Philippine National Bank |
| Liberty Flour vs. Metropolitan Bank Trust | Liberty Flour vs. Bank of the | Liberty Flour vs. Security Bank Corp | Liberty Flour vs. Crown Asia Chemicals |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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