Correlation Between Metro Bank and Leroy Seafood
Can any of the company-specific risk be diversified away by investing in both Metro Bank and Leroy Seafood 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 Bank and Leroy Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Bank PLC and Leroy Seafood Group, you can compare the effects of market volatilities on Metro Bank and Leroy Seafood 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 Bank with a short position of Leroy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Bank and Leroy Seafood.
Diversification Opportunities for Metro Bank and Leroy Seafood
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metro and Leroy is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Metro Bank PLC and Leroy Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leroy Seafood Group and Metro Bank 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 Bank PLC are associated (or correlated) with Leroy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leroy Seafood Group has no effect on the direction of Metro Bank i.e., Metro Bank and Leroy Seafood go up and down completely randomly.
Pair Corralation between Metro Bank and Leroy Seafood
Assuming the 90 days trading horizon Metro Bank is expected to generate 5.78 times less return on investment than Leroy Seafood. In addition to that, Metro Bank is 1.88 times more volatile than Leroy Seafood Group. It trades about 0.0 of its total potential returns per unit of risk. Leroy Seafood Group is currently generating about 0.01 per unit of volatility. If you would invest 4,971 in Leroy Seafood Group on October 11, 2024 and sell it today you would lose (56.00) from holding Leroy Seafood Group or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Bank PLC vs. Leroy Seafood Group
Performance |
| Timeline |
| Metro Bank PLC |
| Leroy Seafood Group |
Metro Bank and Leroy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Bank and Leroy Seafood
The main advantage of trading using opposite Metro Bank and Leroy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Bank position performs unexpectedly, Leroy Seafood 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 Leroy Seafood will offset losses from the drop in Leroy Seafood's long position.| Metro Bank vs. JD Sports Fashion | Metro Bank vs. Molson Coors Beverage | Metro Bank vs. Verizon Communications | Metro Bank vs. Universal Display Corp |
| Leroy Seafood vs. Caledonia Investments | Leroy Seafood vs. Coeur Mining | Leroy Seafood vs. BlackRock Frontiers Investment | Leroy Seafood vs. Deltex Medical Group |
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.
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