Correlation Between Metro Bank and Amedeo Air
Can any of the company-specific risk be diversified away by investing in both Metro Bank and Amedeo Air 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 Amedeo Air 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 Amedeo Air Four, you can compare the effects of market volatilities on Metro Bank and Amedeo Air 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 Amedeo Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Bank and Amedeo Air.
Diversification Opportunities for Metro Bank and Amedeo Air
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metro and Amedeo is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Metro Bank PLC and Amedeo Air Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedeo Air Four 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 Amedeo Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedeo Air Four has no effect on the direction of Metro Bank i.e., Metro Bank and Amedeo Air go up and down completely randomly.
Pair Corralation between Metro Bank and Amedeo Air
Assuming the 90 days trading horizon Metro Bank is expected to generate 2.44 times less return on investment than Amedeo Air. In addition to that, Metro Bank is 1.99 times more volatile than Amedeo Air Four. It trades about 0.11 of its total potential returns per unit of risk. Amedeo Air Four is currently generating about 0.52 per unit of volatility. If you would invest 5,490 in Amedeo Air Four on November 1, 2024 and sell it today you would earn a total of 810.00 from holding Amedeo Air Four or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Bank PLC vs. Amedeo Air Four
Performance |
| Timeline |
| Metro Bank PLC |
| Amedeo Air Four |
Metro Bank and Amedeo Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Bank and Amedeo Air
The main advantage of trading using opposite Metro Bank and Amedeo Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Bank position performs unexpectedly, Amedeo Air 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 Amedeo Air will offset losses from the drop in Amedeo Air's long position.| Metro Bank vs. Futura Medical | Metro Bank vs. Nordea Bank Abp | Metro Bank vs. Bankers Investment Trust | Metro Bank vs. Sartorius Stedim Biotech |
| Amedeo Air vs. Erste Group Bank | Amedeo Air vs. Science in Sport | Amedeo Air vs. Metro Bank PLC | Amedeo Air vs. Discover Financial Services |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |