Correlation Between MetLife and 59156RCC0

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Can any of the company-specific risk be diversified away by investing in both MetLife and 59156RCC0 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 59156RCC0 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and MET 5 15 JUL 52, you can compare the effects of market volatilities on MetLife and 59156RCC0 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 59156RCC0. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and 59156RCC0.

Diversification Opportunities for MetLife and 59156RCC0

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between MetLife and 59156RCC0 is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and MET 5 15 JUL 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 59156RCC0 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 59156RCC0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 59156RCC0 has no effect on the direction of MetLife i.e., MetLife and 59156RCC0 go up and down completely randomly.

Pair Corralation between MetLife and 59156RCC0

Considering the 90-day investment horizon MetLife is expected to generate 24.57 times less return on investment than 59156RCC0. But when comparing it to its historical volatility, MetLife is 1.12 times less risky than 59156RCC0. It trades about 0.0 of its potential returns per unit of risk. MET 5 15 JUL 52 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  9,333  in MET 5 15 JUL 52 on September 12, 2024 and sell it today you would earn a total of  260.00  from holding MET 5 15 JUL 52 or generate 2.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy90.48%
ValuesDaily Returns

MetLife  vs.  MET 5 15 JUL 52

 Performance 
       Timeline  
MetLife 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in MetLife are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, MetLife may actually be approaching a critical reversion point that can send shares even higher in January 2025.
59156RCC0 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days MET 5 15 JUL 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 59156RCC0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

MetLife and 59156RCC0 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MetLife and 59156RCC0

The main advantage of trading using opposite MetLife and 59156RCC0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, 59156RCC0 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 59156RCC0 will offset losses from the drop in 59156RCC0's long position.
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The idea behind MetLife and MET 5 15 JUL 52 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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