Correlation Between MetLife and Life On
Can any of the company-specific risk be diversified away by investing in both MetLife and Life On 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 Life On into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and Life On Earth, you can compare the effects of market volatilities on MetLife and Life On 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 Life On. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and Life On.
Diversification Opportunities for MetLife and Life On
Pay attention - limited upside
The 3 months correlation between MetLife and Life is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Life On Earth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life On Earth 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 Life On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life On Earth has no effect on the direction of MetLife i.e., MetLife and Life On go up and down completely randomly.
Pair Corralation between MetLife and Life On
If you would invest (100.00) in Life On Earth on January 7, 2025 and sell it today you would earn a total of 100.00 from holding Life On Earth or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
MetLife vs. Life On Earth
Performance |
| Timeline |
| MetLife |
| Life On Earth |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
MetLife and Life On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and Life On
The main advantage of trading using opposite MetLife and Life On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, Life On 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 Life On will offset losses from the drop in Life On's long position.| MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial Corp |
| Life On vs. Colabor Group | Life On vs. Bunzl plc | Life On vs. Innovative Food Hldg | Life On vs. Performance Food Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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