Correlation Between MetLife and Shenzhen Expressway
Can any of the company-specific risk be diversified away by investing in both MetLife and Shenzhen Expressway 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 Shenzhen Expressway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and Shenzhen Expressway, you can compare the effects of market volatilities on MetLife and Shenzhen Expressway 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 Shenzhen Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and Shenzhen Expressway.
Diversification Opportunities for MetLife and Shenzhen Expressway
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MetLife and Shenzhen is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Shenzhen Expressway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Expressway 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 Shenzhen Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Expressway has no effect on the direction of MetLife i.e., MetLife and Shenzhen Expressway go up and down completely randomly.
Pair Corralation between MetLife and Shenzhen Expressway
If you would invest 8,177 in MetLife on September 12, 2024 and sell it today you would lose (3.00) from holding MetLife or give up 0.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
MetLife vs. Shenzhen Expressway
Performance |
| Timeline |
| MetLife |
| Shenzhen Expressway |
MetLife and Shenzhen Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and Shenzhen Expressway
The main advantage of trading using opposite MetLife and Shenzhen Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, Shenzhen Expressway 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 Shenzhen Expressway will offset losses from the drop in Shenzhen Expressway's long position.| MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial Corp |
| Shenzhen Expressway vs. Zhejiang Expressway Co | Shenzhen Expressway vs. Jiangsu Expressway Co | Shenzhen Expressway vs. Jiangsu Expressway | Shenzhen Expressway vs. Yuexiu Transport Infrastructure |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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