Correlation Between MetLife Preferred and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both MetLife Preferred and Aegean Airlines 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 MetLife Preferred and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife Preferred Stock and Aegean Airlines SA, you can compare the effects of market volatilities on MetLife Preferred and Aegean Airlines 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 MetLife Preferred with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife Preferred and Aegean Airlines.
Diversification Opportunities for MetLife Preferred and Aegean Airlines
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MetLife and Aegean is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding MetLife Preferred Stock and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA and MetLife Preferred 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 MetLife Preferred Stock are associated (or correlated) with Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of MetLife Preferred i.e., MetLife Preferred and Aegean Airlines go up and down completely randomly.
Pair Corralation between MetLife Preferred and Aegean Airlines
Assuming the 90 days trading horizon MetLife Preferred Stock is expected to generate 0.26 times more return on investment than Aegean Airlines. However, MetLife Preferred Stock is 3.89 times less risky than Aegean Airlines. It trades about 0.01 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.22 per unit of risk. If you would invest 2,450 in MetLife Preferred Stock on August 28, 2024 and sell it today you would earn a total of 3.00 from holding MetLife Preferred Stock or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetLife Preferred Stock vs. Aegean Airlines SA
Performance |
| Timeline |
| MetLife Preferred Stock |
| Aegean Airlines SA |
MetLife Preferred and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife Preferred and Aegean Airlines
The main advantage of trading using opposite MetLife Preferred and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife Preferred position performs unexpectedly, Aegean Airlines 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 Aegean Airlines will offset losses from the drop in Aegean Airlines' long position.| MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. MetLife Preferred Stock | MetLife Preferred vs. Brighthouse Financial |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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