Correlation Between Metro Retail and Top Frontier
Can any of the company-specific risk be diversified away by investing in both Metro Retail and Top Frontier 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 Top Frontier 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 Top Frontier Investment, you can compare the effects of market volatilities on Metro Retail and Top Frontier 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 Top Frontier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Retail and Top Frontier.
Diversification Opportunities for Metro Retail and Top Frontier
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Metro and Top is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Metro Retail Stores and Top Frontier Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Frontier Investment 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 Top Frontier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Frontier Investment has no effect on the direction of Metro Retail i.e., Metro Retail and Top Frontier go up and down completely randomly.
Pair Corralation between Metro Retail and Top Frontier
Assuming the 90 days trading horizon Metro Retail Stores is expected to generate 0.38 times more return on investment than Top Frontier. However, Metro Retail Stores is 2.62 times less risky than Top Frontier. It trades about 0.01 of its potential returns per unit of risk. Top Frontier Investment is currently generating about 0.0 per unit of risk. If you would invest 120.00 in Metro Retail Stores on November 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 | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Metro Retail Stores vs. Top Frontier Investment
Performance |
| Timeline |
| Metro Retail Stores |
| Top Frontier Investment |
Metro Retail and Top Frontier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Retail and Top Frontier
The main advantage of trading using opposite Metro Retail and Top Frontier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Retail position performs unexpectedly, Top Frontier 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 Top Frontier will offset losses from the drop in Top Frontier's long position.| Metro Retail vs. Rizal Commercial Banking | Metro Retail vs. Security Bank Corp | Metro Retail vs. Converge Information Communications | Metro Retail vs. Crown Asia Chemicals |
| Top Frontier vs. Lepanto Consolidated Mining | Top Frontier vs. Philex Mining Corp | Top Frontier vs. STI Education Systems | Top Frontier vs. Prime Media Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |