Correlation Between MetLife and Recharge Resources
Can any of the company-specific risk be diversified away by investing in both MetLife and Recharge Resources 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 Recharge Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and Recharge Resources, you can compare the effects of market volatilities on MetLife and Recharge Resources 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 Recharge Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and Recharge Resources.
Diversification Opportunities for MetLife and Recharge Resources
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MetLife and Recharge is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Recharge Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recharge Resources 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 Recharge Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recharge Resources has no effect on the direction of MetLife i.e., MetLife and Recharge Resources go up and down completely randomly.
Pair Corralation between MetLife and Recharge Resources
Considering the 90-day investment horizon MetLife is expected to generate 0.16 times more return on investment than Recharge Resources. However, MetLife is 6.3 times less risky than Recharge Resources. It trades about 0.12 of its potential returns per unit of risk. Recharge Resources is currently generating about -0.02 per unit of risk. If you would invest 7,012 in MetLife on September 3, 2024 and sell it today you would earn a total of 1,811 from holding MetLife or generate 25.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetLife vs. Recharge Resources
Performance |
| Timeline |
| MetLife |
| Recharge Resources |
MetLife and Recharge Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and Recharge Resources
The main advantage of trading using opposite MetLife and Recharge Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, Recharge Resources 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 Recharge Resources will offset losses from the drop in Recharge Resources' long position.| MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial Corp |
| Recharge Resources vs. Qubec Nickel Corp | Recharge Resources vs. IGO Limited | Recharge Resources vs. Avarone Metals | Recharge Resources vs. Adriatic Metals PLC |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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