Correlation Between MetLife Preferred and Allstate
Can any of the company-specific risk be diversified away by investing in both MetLife Preferred and Allstate 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 Allstate 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 The Allstate, you can compare the effects of market volatilities on MetLife Preferred and Allstate 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 Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife Preferred and Allstate.
Diversification Opportunities for MetLife Preferred and Allstate
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MetLife and Allstate is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding MetLife Preferred Stock and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate 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 Allstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allstate has no effect on the direction of MetLife Preferred i.e., MetLife Preferred and Allstate go up and down completely randomly.
Pair Corralation between MetLife Preferred and Allstate
Assuming the 90 days trading horizon MetLife Preferred Stock is expected to generate 0.69 times more return on investment than Allstate. However, MetLife Preferred Stock is 1.44 times less risky than Allstate. It trades about 0.03 of its potential returns per unit of risk. The Allstate is currently generating about 0.0 per unit of risk. If you would invest 2,344 in MetLife Preferred Stock on November 5, 2024 and sell it today you would earn a total of 103.00 from holding MetLife Preferred Stock or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetLife Preferred Stock vs. The Allstate
Performance |
| Timeline |
| MetLife Preferred Stock |
| Allstate |
MetLife Preferred and Allstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife Preferred and Allstate
The main advantage of trading using opposite MetLife Preferred and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife Preferred position performs unexpectedly, Allstate 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 Allstate will offset losses from the drop in Allstate's long position.| MetLife Preferred vs. Jackson Financial | MetLife Preferred vs. MetLife Preferred Stock | MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. Brighthouse Financial |
| Allstate vs. The Allstate | Allstate vs. Aspen Insurance Holdings | Allstate vs. AmTrust Financial Services | Allstate vs. Argo Group International |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Positions Ratings 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 | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |