Correlation Between Metro Bank and JLEN Environmental
Can any of the company-specific risk be diversified away by investing in both Metro Bank and JLEN Environmental 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 JLEN Environmental 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 JLEN Environmental Assets, you can compare the effects of market volatilities on Metro Bank and JLEN Environmental 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 JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Bank and JLEN Environmental.
Diversification Opportunities for Metro Bank and JLEN Environmental
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Metro and JLEN is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Metro Bank PLC and JLEN Environmental Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLEN Environmental Assets 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 JLEN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLEN Environmental Assets has no effect on the direction of Metro Bank i.e., Metro Bank and JLEN Environmental go up and down completely randomly.
Pair Corralation between Metro Bank and JLEN Environmental
Assuming the 90 days trading horizon Metro Bank PLC is expected to generate 2.64 times more return on investment than JLEN Environmental. However, Metro Bank is 2.64 times more volatile than JLEN Environmental Assets. It trades about 0.0 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.06 per unit of risk. If you would invest 13,900 in Metro Bank PLC on October 17, 2024 and sell it today you would lose (4,500) from holding Metro Bank PLC or give up 32.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Bank PLC vs. JLEN Environmental Assets
Performance |
| Timeline |
| Metro Bank PLC |
| JLEN Environmental Assets |
Metro Bank and JLEN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Bank and JLEN Environmental
The main advantage of trading using opposite Metro Bank and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Bank position performs unexpectedly, JLEN Environmental 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 JLEN Environmental will offset losses from the drop in JLEN Environmental's long position.| Metro Bank vs. Gamma Communications PLC | Metro Bank vs. BlackRock Frontiers Investment | Metro Bank vs. Bankers Investment Trust | Metro Bank vs. Lindsell Train Investment |
| JLEN Environmental vs. Universal Display Corp | JLEN Environmental vs. Blackstone Loan Financing | JLEN Environmental vs. Metro Bank PLC | JLEN Environmental vs. Sydbank |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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