Correlation Between MetLife and Aviva PLC
Can any of the company-specific risk be diversified away by investing in both MetLife and Aviva PLC 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 and Aviva PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and Aviva PLC ADR, you can compare the effects of market volatilities on MetLife and Aviva PLC 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 with a short position of Aviva PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and Aviva PLC.
Diversification Opportunities for MetLife and Aviva PLC
Very good diversification
The 3 months correlation between MetLife and Aviva is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Aviva PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aviva PLC ADR and MetLife 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 are associated (or correlated) with Aviva PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aviva PLC ADR has no effect on the direction of MetLife i.e., MetLife and Aviva PLC go up and down completely randomly.
Pair Corralation between MetLife and Aviva PLC
If you would invest 8,225 in MetLife on August 30, 2024 and sell it today you would earn a total of 600.00 from holding MetLife or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
MetLife vs. Aviva PLC ADR
Performance |
| Timeline |
| MetLife |
| Aviva PLC ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MetLife and Aviva PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and Aviva PLC
The main advantage of trading using opposite MetLife and Aviva PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, Aviva PLC 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 Aviva PLC will offset losses from the drop in Aviva PLC's long position.| MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial Corp |
| Aviva PLC vs. AXA SA | Aviva PLC vs. Assicurazioni Generali SpA | Aviva PLC vs. Athene Holding | Aviva PLC vs. ageas SANV |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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