Correlation Between Metropolitan Bank and Metro Retail
Can any of the company-specific risk be diversified away by investing in both Metropolitan Bank and Metro Retail 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 Metro Retail 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 Metro Retail Stores, you can compare the effects of market volatilities on Metropolitan Bank and Metro Retail 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 Metro Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Bank and Metro Retail.
Diversification Opportunities for Metropolitan Bank and Metro Retail
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metropolitan and Metro is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Bank Trust and Metro Retail Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Retail Stores 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 Metro Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Retail Stores has no effect on the direction of Metropolitan Bank i.e., Metropolitan Bank and Metro Retail go up and down completely randomly.
Pair Corralation between Metropolitan Bank and Metro Retail
Assuming the 90 days trading horizon Metropolitan Bank Trust is expected to under-perform the Metro Retail. In addition to that, Metropolitan Bank is 1.9 times more volatile than Metro Retail Stores. It trades about -0.2 of its total potential returns per unit of risk. Metro Retail Stores is currently generating about 0.12 per unit of volatility. If you would invest 120.00 in Metro Retail Stores on October 25, 2024 and sell it today you would earn a total of 2.00 from holding Metro Retail Stores or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan Bank Trust vs. Metro Retail Stores
Performance |
| Timeline |
| Metropolitan Bank Trust |
| Metro Retail Stores |
Metropolitan Bank and Metro Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Bank and Metro Retail
The main advantage of trading using opposite Metropolitan Bank and Metro Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Bank position performs unexpectedly, Metro Retail 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 Metro Retail will offset losses from the drop in Metro Retail's long position.| Metropolitan Bank vs. Cebu Air Preferred | Metropolitan Bank vs. Atlas Consolidated Mining | Metropolitan Bank vs. Globe Telecom | Metropolitan Bank vs. Prime Media Holdings |
| Metro Retail vs. Union Bank of | Metro Retail vs. Philex Mining Corp | Metro Retail vs. Atlas Consolidated Mining | Metro Retail vs. Metropolitan Bank Trust |
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.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |