Correlation Between MetLife Preferred and Centene Corp
Can any of the company-specific risk be diversified away by investing in both MetLife Preferred and Centene Corp 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 Centene Corp 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 Centene Corp, you can compare the effects of market volatilities on MetLife Preferred and Centene Corp 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 Centene Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife Preferred and Centene Corp.
Diversification Opportunities for MetLife Preferred and Centene Corp
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MetLife and Centene is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding MetLife Preferred Stock and Centene Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centene Corp 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 Centene Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centene Corp has no effect on the direction of MetLife Preferred i.e., MetLife Preferred and Centene Corp go up and down completely randomly.
Pair Corralation between MetLife Preferred and Centene Corp
Assuming the 90 days trading horizon MetLife Preferred Stock is expected to generate 0.43 times more return on investment than Centene Corp. However, MetLife Preferred Stock is 2.32 times less risky than Centene Corp. It trades about 0.03 of its potential returns per unit of risk. Centene Corp is currently generating about -0.01 per unit of risk. If you would invest 2,245 in MetLife Preferred Stock on September 1, 2024 and sell it today you would earn a total of 180.00 from holding MetLife Preferred Stock or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetLife Preferred Stock vs. Centene Corp
Performance |
| Timeline |
| MetLife Preferred Stock |
| Centene Corp |
MetLife Preferred and Centene Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife Preferred and Centene Corp
The main advantage of trading using opposite MetLife Preferred and Centene Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife Preferred position performs unexpectedly, Centene Corp 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 Centene Corp will offset losses from the drop in Centene Corp's long position.| MetLife Preferred vs. Jackson Financial | MetLife Preferred vs. MetLife Preferred Stock | MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. Brighthouse Financial |
| Centene Corp vs. Humana Inc | Centene Corp vs. Elevance Health | Centene Corp vs. UnitedHealth Group Incorporated | Centene Corp vs. CVS Health Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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