Correlation Between MetLife and 67021CAS6

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Can any of the company-specific risk be diversified away by investing in both MetLife and 67021CAS6 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 67021CAS6 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and ES 455 01 JUN 52, you can compare the effects of market volatilities on MetLife and 67021CAS6 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 67021CAS6. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and 67021CAS6.

Diversification Opportunities for MetLife and 67021CAS6

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between MetLife and 67021CAS6 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and ES 455 01 JUN 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES 455 01 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 67021CAS6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES 455 01 has no effect on the direction of MetLife i.e., MetLife and 67021CAS6 go up and down completely randomly.

Pair Corralation between MetLife and 67021CAS6

Considering the 90-day investment horizon MetLife is expected to generate 128.08 times less return on investment than 67021CAS6. But when comparing it to its historical volatility, MetLife is 1.48 times less risky than 67021CAS6. It trades about 0.0 of its potential returns per unit of risk. ES 455 01 JUN 52 is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest  8,678  in ES 455 01 JUN 52 on September 12, 2024 and sell it today you would earn a total of  676.00  from holding ES 455 01 JUN 52 or generate 7.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy45.45%
ValuesDaily Returns

MetLife  vs.  ES 455 01 JUN 52

 Performance 
       Timeline  
MetLife 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in MetLife are ranked lower than 5 (%) 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.
ES 455 01 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in ES 455 01 JUN 52 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 67021CAS6 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

MetLife and 67021CAS6 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MetLife and 67021CAS6

The main advantage of trading using opposite MetLife and 67021CAS6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, 67021CAS6 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 67021CAS6 will offset losses from the drop in 67021CAS6's long position.
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The idea behind MetLife and ES 455 01 JUN 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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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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