Correlation Between MetLife and OverActive Media
Can any of the company-specific risk be diversified away by investing in both MetLife and OverActive Media 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 OverActive Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and OverActive Media Corp, you can compare the effects of market volatilities on MetLife and OverActive Media 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 OverActive Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and OverActive Media.
Diversification Opportunities for MetLife and OverActive Media
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MetLife and OverActive is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and OverActive Media Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OverActive Media Corp 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 OverActive Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OverActive Media Corp has no effect on the direction of MetLife i.e., MetLife and OverActive Media go up and down completely randomly.
Pair Corralation between MetLife and OverActive Media
Considering the 90-day investment horizon MetLife is expected to generate 4.85 times less return on investment than OverActive Media. But when comparing it to its historical volatility, MetLife is 5.61 times less risky than OverActive Media. It trades about 0.04 of its potential returns per unit of risk. OverActive Media Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 21.00 in OverActive Media Corp on September 4, 2024 and sell it today you would lose (2.00) from holding OverActive Media Corp or give up 9.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetLife vs. OverActive Media Corp
Performance |
| Timeline |
| MetLife |
| OverActive Media Corp |
MetLife and OverActive Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and OverActive Media
The main advantage of trading using opposite MetLife and OverActive Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, OverActive Media 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 OverActive Media will offset losses from the drop in OverActive Media's long position.| MetLife vs. Aflac Incorporated | MetLife vs. Manulife Financial Corp | MetLife vs. Jackson Financial | MetLife vs. Globe Life |
| OverActive Media vs. Jackson Financial | OverActive Media vs. MetLife | OverActive Media vs. McDonalds | OverActive Media vs. Alcoa 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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