Correlation Between MetLife Preferred and AXIS Capital
Can any of the company-specific risk be diversified away by investing in both MetLife Preferred and AXIS Capital 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 AXIS Capital 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 AXIS Capital Holdings, you can compare the effects of market volatilities on MetLife Preferred and AXIS Capital 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 AXIS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife Preferred and AXIS Capital.
Diversification Opportunities for MetLife Preferred and AXIS Capital
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MetLife and AXIS is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding MetLife Preferred Stock and AXIS Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIS Capital Holdings 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 AXIS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIS Capital Holdings has no effect on the direction of MetLife Preferred i.e., MetLife Preferred and AXIS Capital go up and down completely randomly.
Pair Corralation between MetLife Preferred and AXIS Capital
Assuming the 90 days trading horizon MetLife Preferred is expected to generate 2.46 times less return on investment than AXIS Capital. But when comparing it to its historical volatility, MetLife Preferred Stock is 1.98 times less risky than AXIS Capital. It trades about 0.06 of its potential returns per unit of risk. AXIS Capital Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,968 in AXIS Capital Holdings on September 1, 2024 and sell it today you would earn a total of 3,336 from holding AXIS Capital Holdings or generate 55.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetLife Preferred Stock vs. AXIS Capital Holdings
Performance |
| Timeline |
| MetLife Preferred Stock |
| AXIS Capital Holdings |
MetLife Preferred and AXIS Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife Preferred and AXIS Capital
The main advantage of trading using opposite MetLife Preferred and AXIS Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife Preferred position performs unexpectedly, AXIS Capital 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 AXIS Capital will offset losses from the drop in AXIS Capital's long position.| MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. MetLife Preferred Stock | MetLife Preferred vs. Brighthouse Financial |
| AXIS Capital vs. Assured Guaranty | AXIS Capital vs. Enact Holdings | AXIS Capital vs. NMI Holdings | AXIS Capital vs. Radian 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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