Correlation Between MetLife Preferred and Sanlam
Can any of the company-specific risk be diversified away by investing in both MetLife Preferred and Sanlam 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 Sanlam 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 Sanlam Ltd PK, you can compare the effects of market volatilities on MetLife Preferred and Sanlam 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 Sanlam. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife Preferred and Sanlam.
Diversification Opportunities for MetLife Preferred and Sanlam
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MetLife and Sanlam is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding MetLife Preferred Stock and Sanlam Ltd PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanlam Ltd PK 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 Sanlam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanlam Ltd PK has no effect on the direction of MetLife Preferred i.e., MetLife Preferred and Sanlam go up and down completely randomly.
Pair Corralation between MetLife Preferred and Sanlam
Assuming the 90 days trading horizon MetLife Preferred is expected to generate 2.38 times less return on investment than Sanlam. But when comparing it to its historical volatility, MetLife Preferred Stock is 2.96 times less risky than Sanlam. It trades about 0.07 of its potential returns per unit of risk. Sanlam Ltd PK is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 564.00 in Sanlam Ltd PK on November 2, 2024 and sell it today you would earn a total of 319.00 from holding Sanlam Ltd PK or generate 56.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetLife Preferred Stock vs. Sanlam Ltd PK
Performance |
| Timeline |
| MetLife Preferred Stock |
| Sanlam Ltd PK |
MetLife Preferred and Sanlam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife Preferred and Sanlam
The main advantage of trading using opposite MetLife Preferred and Sanlam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife Preferred position performs unexpectedly, Sanlam 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 Sanlam will offset losses from the drop in Sanlam's long position.| MetLife Preferred vs. Assurant | MetLife Preferred vs. Affiliated Managers Group, | MetLife Preferred vs. The Carlyle Group | MetLife Preferred vs. Affiliated Managers Group, |
| Sanlam vs. Ping An Insurance | Sanlam vs. CNO Financial Group | Sanlam vs. Genworth Financial | Sanlam vs. MetLife Preferred Stock |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |