Correlation Between MetLife and EDISON
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By analyzing existing cross correlation between MetLife and EDISON INTL 4125, you can compare the effects of market volatilities on MetLife and EDISON 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 EDISON. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and EDISON.
Diversification Opportunities for MetLife and EDISON
Excellent diversification
The 3 months correlation between MetLife and EDISON is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and EDISON INTL 4125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDISON INTL 4125 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 EDISON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDISON INTL 4125 has no effect on the direction of MetLife i.e., MetLife and EDISON go up and down completely randomly.
Pair Corralation between MetLife and EDISON
Considering the 90-day investment horizon MetLife is expected to generate 2.21 times more return on investment than EDISON. However, MetLife is 2.21 times more volatile than EDISON INTL 4125. It trades about 0.06 of its potential returns per unit of risk. EDISON INTL 4125 is currently generating about -0.09 per unit of risk. If you would invest 8,242 in MetLife on September 5, 2024 and sell it today you would earn a total of 330.00 from holding MetLife or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
MetLife vs. EDISON INTL 4125
Performance |
| Timeline |
| MetLife |
| EDISON INTL 4125 |
MetLife and EDISON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and EDISON
The main advantage of trading using opposite MetLife and EDISON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, EDISON 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 EDISON will offset losses from the drop in EDISON's long position.| MetLife vs. Aflac Incorporated | MetLife vs. Manulife Financial Corp | MetLife vs. Jackson Financial | MetLife vs. CNO Financial 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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