Correlation Between Metro Retail and Concepcion Industrial
Can any of the company-specific risk be diversified away by investing in both Metro Retail and Concepcion Industrial 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 Concepcion Industrial 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 Concepcion Industrial Corp, you can compare the effects of market volatilities on Metro Retail and Concepcion Industrial 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 Concepcion Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Retail and Concepcion Industrial.
Diversification Opportunities for Metro Retail and Concepcion Industrial
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metro and Concepcion is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Metro Retail Stores and Concepcion Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concepcion Industrial 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 Concepcion Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concepcion Industrial has no effect on the direction of Metro Retail i.e., Metro Retail and Concepcion Industrial go up and down completely randomly.
Pair Corralation between Metro Retail and Concepcion Industrial
Assuming the 90 days trading horizon Metro Retail Stores is expected to under-perform the Concepcion Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Metro Retail Stores is 1.17 times less risky than Concepcion Industrial. The stock trades about -0.08 of its potential returns per unit of risk. The Concepcion Industrial Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,408 in Concepcion Industrial Corp on August 28, 2024 and sell it today you would lose (18.00) from holding Concepcion Industrial Corp or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Metro Retail Stores vs. Concepcion Industrial Corp
Performance |
| Timeline |
| Metro Retail Stores |
| Concepcion Industrial |
Metro Retail and Concepcion Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Retail and Concepcion Industrial
The main advantage of trading using opposite Metro Retail and Concepcion Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Retail position performs unexpectedly, Concepcion Industrial 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 Concepcion Industrial will offset losses from the drop in Concepcion Industrial's long position.| Metro Retail vs. Allhome Corp | Metro Retail vs. Jollibee Foods Corp | Metro Retail vs. LFM Properties Corp | Metro Retail vs. PXP Energy Corp |
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.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world |