Correlation Between MetLife and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both MetLife and CompuGroup Medical 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 CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and CompuGroup Medical SE, you can compare the effects of market volatilities on MetLife and CompuGroup Medical 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 CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and CompuGroup Medical.
Diversification Opportunities for MetLife and CompuGroup Medical
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between MetLife and CompuGroup is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical 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 CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of MetLife i.e., MetLife and CompuGroup Medical go up and down completely randomly.
Pair Corralation between MetLife and CompuGroup Medical
Considering the 90-day investment horizon MetLife is expected to generate 0.29 times more return on investment than CompuGroup Medical. However, MetLife is 3.42 times less risky than CompuGroup Medical. It trades about 0.1 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about -0.07 per unit of risk. If you would invest 5,197 in MetLife on September 12, 2024 and sell it today you would earn a total of 2,977 from holding MetLife or generate 57.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.5% |
| Values | Daily Returns |
MetLife vs. CompuGroup Medical SE
Performance |
| Timeline |
| MetLife |
| CompuGroup Medical |
MetLife and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and CompuGroup Medical
The main advantage of trading using opposite MetLife and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial Corp |
| CompuGroup Medical vs. Veeva Systems Class | CompuGroup Medical vs. GE HealthCare Technologies | CompuGroup Medical vs. M3 Inc | CompuGroup Medical vs. Solventum 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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