Correlation Between Metro Retail and Manila Mining
Can any of the company-specific risk be diversified away by investing in both Metro Retail and Manila Mining 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 Manila Mining 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 Manila Mining Corp, you can compare the effects of market volatilities on Metro Retail and Manila Mining 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 Manila Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Retail and Manila Mining.
Diversification Opportunities for Metro Retail and Manila Mining
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metro and Manila is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Metro Retail Stores and Manila Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manila Mining Corp 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 Manila Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manila Mining Corp has no effect on the direction of Metro Retail i.e., Metro Retail and Manila Mining go up and down completely randomly.
Pair Corralation between Metro Retail and Manila Mining
Assuming the 90 days trading horizon Metro Retail Stores is expected to generate 0.68 times more return on investment than Manila Mining. However, Metro Retail Stores is 1.48 times less risky than Manila Mining. It trades about -0.08 of its potential returns per unit of risk. Manila Mining Corp is currently generating about -0.76 per unit of risk. If you would invest 122.00 in Metro Retail Stores on August 29, 2024 and sell it today you would lose (3.00) from holding Metro Retail Stores or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 45.0% |
| Values | Daily Returns |
Metro Retail Stores vs. Manila Mining Corp
Performance |
| Timeline |
| Metro Retail Stores |
| Manila Mining Corp |
Metro Retail and Manila Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Retail and Manila Mining
The main advantage of trading using opposite Metro Retail and Manila Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Retail position performs unexpectedly, Manila Mining 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 Manila Mining will offset losses from the drop in Manila Mining's long position.| Metro Retail vs. Allhome Corp | Metro Retail vs. Jollibee Foods Corp | Metro Retail vs. LFM Properties Corp | Metro Retail vs. Altus Property Ventures |
| Manila Mining vs. Nickel Asia Corp | Manila Mining vs. Apollo Global Capital | Manila Mining vs. Philex Mining Corp | Manila Mining vs. Atlas Consolidated Mining |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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