Correlation Between Metro Retail and Integrated Micro
Can any of the company-specific risk be diversified away by investing in both Metro Retail and Integrated Micro 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 Integrated Micro 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 Integrated Micro Electronics, you can compare the effects of market volatilities on Metro Retail and Integrated Micro 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 Integrated Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Retail and Integrated Micro.
Diversification Opportunities for Metro Retail and Integrated Micro
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metro and Integrated is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Metro Retail Stores and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele 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 Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of Metro Retail i.e., Metro Retail and Integrated Micro go up and down completely randomly.
Pair Corralation between Metro Retail and Integrated Micro
Assuming the 90 days trading horizon Metro Retail Stores is expected to generate 0.59 times more return on investment than Integrated Micro. However, Metro Retail Stores is 1.7 times less risky than Integrated Micro. It trades about 0.01 of its potential returns per unit of risk. Integrated Micro Electronics is currently generating about -0.09 per unit of risk. If you would invest 121.00 in Metro Retail Stores on September 1, 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 Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Metro Retail Stores vs. Integrated Micro Electronics
Performance |
| Timeline |
| Metro Retail Stores |
| Integrated Micro Ele |
Metro Retail and Integrated Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Retail and Integrated Micro
The main advantage of trading using opposite Metro Retail and Integrated Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Retail position performs unexpectedly, Integrated Micro 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 Integrated Micro will offset losses from the drop in Integrated Micro's long position.| Metro Retail vs. Philex Mining Corp | Metro Retail vs. Apex Mining Co | Metro Retail vs. Top Frontier Investment | Metro Retail vs. SM Investments Corp |
| Integrated Micro vs. GT Capital Holdings | Integrated Micro vs. Allhome Corp | Integrated Micro vs. Jollibee Foods Corp | Integrated Micro vs. LFM Properties 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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