Correlation Between Metropolitan Bank and Banner
Can any of the company-specific risk be diversified away by investing in both Metropolitan Bank and Banner 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 Banner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan Bank Holding and Banner, you can compare the effects of market volatilities on Metropolitan Bank and Banner 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 Banner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Bank and Banner.
Diversification Opportunities for Metropolitan Bank and Banner
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Metropolitan and Banner is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Bank Holding and Banner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banner 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 Holding are associated (or correlated) with Banner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banner has no effect on the direction of Metropolitan Bank i.e., Metropolitan Bank and Banner go up and down completely randomly.
Pair Corralation between Metropolitan Bank and Banner
Considering the 90-day investment horizon Metropolitan Bank Holding is expected to generate 1.26 times more return on investment than Banner. However, Metropolitan Bank is 1.26 times more volatile than Banner. It trades about 0.14 of its potential returns per unit of risk. Banner is currently generating about 0.17 per unit of risk. If you would invest 5,044 in Metropolitan Bank Holding on September 3, 2024 and sell it today you would earn a total of 1,450 from holding Metropolitan Bank Holding or generate 28.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan Bank Holding vs. Banner
Performance |
| Timeline |
| Metropolitan Bank Holding |
| Banner |
Metropolitan Bank and Banner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Bank and Banner
The main advantage of trading using opposite Metropolitan Bank and Banner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Bank position performs unexpectedly, Banner 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 Banner will offset losses from the drop in Banner's long position.| Metropolitan Bank vs. Customers Bancorp | Metropolitan Bank vs. BayCom Corp | Metropolitan Bank vs. Capital Bancorp | Metropolitan Bank vs. Investar Holding Corp |
| Banner vs. BancFirst | Banner vs. City Holding | Banner vs. Columbia Banking System | Banner vs. CVB Financial |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |