Correlation Between Metro Retail and Del Monte
Can any of the company-specific risk be diversified away by investing in both Metro Retail and Del Monte 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 Del Monte 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 Del Monte Pacific, you can compare the effects of market volatilities on Metro Retail and Del Monte 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 Del Monte. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Retail and Del Monte.
Diversification Opportunities for Metro Retail and Del Monte
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Metro and Del is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Metro Retail Stores and Del Monte Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Del Monte Pacific 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 Del Monte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Del Monte Pacific has no effect on the direction of Metro Retail i.e., Metro Retail and Del Monte go up and down completely randomly.
Pair Corralation between Metro Retail and Del Monte
Assuming the 90 days trading horizon Metro Retail Stores is expected to generate 0.37 times more return on investment than Del Monte. However, Metro Retail Stores is 2.69 times less risky than Del Monte. It trades about 0.01 of its potential returns per unit of risk. Del Monte Pacific is currently generating about -0.15 per unit of risk. If you would invest 121.00 in Metro Retail Stores on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Metro Retail Stores or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 78.95% |
| Values | Daily Returns |
Metro Retail Stores vs. Del Monte Pacific
Performance |
| Timeline |
| Metro Retail Stores |
| Del Monte Pacific |
Metro Retail and Del Monte Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Retail and Del Monte
The main advantage of trading using opposite Metro Retail and Del Monte positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Retail position performs unexpectedly, Del Monte 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 Del Monte will offset losses from the drop in Del Monte's long position.| Metro Retail vs. Transpacific Broadband Group | Metro Retail vs. Premiere Entertainment | Metro Retail vs. Prime Media Holdings | Metro Retail vs. SM Investments Corp |
| Del Monte vs. Jollibee Foods Corp | Del Monte vs. Philex Mining Corp | Del Monte vs. Figaro Coffee Group | Del Monte vs. Metro Retail Stores |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |