Correlation Between MetLife and Ilika Plc
Can any of the company-specific risk be diversified away by investing in both MetLife and Ilika 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 Ilika Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and Ilika plc, you can compare the effects of market volatilities on MetLife and Ilika 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 Ilika Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and Ilika Plc.
Diversification Opportunities for MetLife and Ilika Plc
Very good diversification
The 3 months correlation between MetLife and Ilika is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Ilika plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilika plc 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 Ilika Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilika plc has no effect on the direction of MetLife i.e., MetLife and Ilika Plc go up and down completely randomly.
Pair Corralation between MetLife and Ilika Plc
Considering the 90-day investment horizon MetLife is expected to generate 0.31 times more return on investment than Ilika Plc. However, MetLife is 3.19 times less risky than Ilika Plc. It trades about 0.12 of its potential returns per unit of risk. Ilika plc is currently generating about -0.02 per unit of risk. If you would invest 6,900 in MetLife on September 5, 2024 and sell it today you would earn a total of 1,672 from holding MetLife or generate 24.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
MetLife vs. Ilika plc
Performance |
| Timeline |
| MetLife |
| Ilika plc |
MetLife and Ilika Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and Ilika Plc
The main advantage of trading using opposite MetLife and Ilika Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, Ilika 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 Ilika Plc will offset losses from the drop in Ilika Plc's long position.| MetLife vs. Aflac Incorporated | MetLife vs. Manulife Financial Corp | MetLife vs. Jackson Financial | MetLife vs. Globe Life |
| Ilika Plc vs. Legrand SA ADR | Ilika Plc vs. Loop Energy | Ilika Plc vs. Sunrise New Energy | Ilika Plc vs. Alfen NV |
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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