Correlation Between Metro Retail and Asia United
Can any of the company-specific risk be diversified away by investing in both Metro Retail and Asia United 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 Metro Retail and Asia United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Retail Stores and Asia United Bank, you can compare the effects of market volatilities on Metro Retail and Asia United 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 Metro Retail with a short position of Asia United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Retail and Asia United.
Diversification Opportunities for Metro Retail and Asia United
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Metro and Asia is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Metro Retail Stores and Asia United Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia United Bank and Metro Retail 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 Metro Retail Stores are associated (or correlated) with Asia United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia United Bank has no effect on the direction of Metro Retail i.e., Metro Retail and Asia United go up and down completely randomly.
Pair Corralation between Metro Retail and Asia United
Assuming the 90 days trading horizon Metro Retail Stores is expected to under-perform the Asia United. In addition to that, Metro Retail is 1.15 times more volatile than Asia United Bank. It trades about -0.04 of its total potential returns per unit of risk. Asia United Bank is currently generating about 0.2 per unit of volatility. If you would invest 3,719 in Asia United Bank on September 3, 2024 and sell it today you would earn a total of 2,531 from holding Asia United Bank or generate 68.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.89% |
| Values | Daily Returns |
Metro Retail Stores vs. Asia United Bank
Performance |
| Timeline |
| Metro Retail Stores |
| Asia United Bank |
Metro Retail and Asia United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Retail and Asia United
The main advantage of trading using opposite Metro Retail and Asia United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Retail position performs unexpectedly, Asia United 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 Asia United will offset losses from the drop in Asia United's long position.| Metro Retail vs. GT Capital Holdings | Metro Retail vs. Allhome Corp | Metro Retail vs. Jollibee Foods Corp | Metro Retail vs. LFM Properties Corp |
| Asia United vs. BDO Unibank | Asia United vs. Metropolitan Bank Trust | Asia United vs. Security Bank Corp | Asia United vs. Union Bank of |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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