Correlation Between Metro Bank and Panther Metals
Can any of the company-specific risk be diversified away by investing in both Metro Bank and Panther Metals 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 Panther Metals 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 Panther Metals PLC, you can compare the effects of market volatilities on Metro Bank and Panther Metals 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 Panther Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Bank and Panther Metals.
Diversification Opportunities for Metro Bank and Panther Metals
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metro and Panther is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Metro Bank PLC and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals PLC 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 Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of Metro Bank i.e., Metro Bank and Panther Metals go up and down completely randomly.
Pair Corralation between Metro Bank and Panther Metals
Assuming the 90 days trading horizon Metro Bank PLC is expected to generate 0.88 times more return on investment than Panther Metals. However, Metro Bank PLC is 1.14 times less risky than Panther Metals. It trades about -0.03 of its potential returns per unit of risk. Panther Metals PLC is currently generating about -0.06 per unit of risk. If you would invest 9,400 in Metro Bank PLC on October 11, 2024 and sell it today you would lose (270.00) from holding Metro Bank PLC or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Bank PLC vs. Panther Metals PLC
Performance |
| Timeline |
| Metro Bank PLC |
| Panther Metals PLC |
Metro Bank and Panther Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Bank and Panther Metals
The main advantage of trading using opposite Metro Bank and Panther Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Bank position performs unexpectedly, Panther Metals 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 Panther Metals will offset losses from the drop in Panther Metals' 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 |
| Panther Metals vs. Aeorema Communications Plc | Panther Metals vs. Coeur Mining | Panther Metals vs. Virgin Wines UK | Panther Metals vs. Atalaya 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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