Correlation Between Metro Bank and Symphony Environmental
Can any of the company-specific risk be diversified away by investing in both Metro Bank and Symphony 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 Symphony 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 Symphony Environmental Technologies, you can compare the effects of market volatilities on Metro Bank and Symphony 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 Symphony Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Bank and Symphony Environmental.
Diversification Opportunities for Metro Bank and Symphony Environmental
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metro and Symphony is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Metro Bank PLC and Symphony Environmental Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Environmental 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 Symphony Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Environmental has no effect on the direction of Metro Bank i.e., Metro Bank and Symphony Environmental go up and down completely randomly.
Pair Corralation between Metro Bank and Symphony Environmental
Assuming the 90 days trading horizon Metro Bank PLC is expected to generate 0.67 times more return on investment than Symphony Environmental. However, Metro Bank PLC is 1.49 times less risky than Symphony Environmental. It trades about 0.0 of its potential returns per unit of risk. Symphony Environmental Technologies is currently generating about -0.02 per unit of risk. If you would invest 13,700 in Metro Bank PLC on October 26, 2024 and sell it today you would lose (4,220) from holding Metro Bank PLC or give up 30.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Bank PLC vs. Symphony Environmental Technol
Performance |
| Timeline |
| Metro Bank PLC |
| Symphony Environmental |
Metro Bank and Symphony Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Bank and Symphony Environmental
The main advantage of trading using opposite Metro Bank and Symphony Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Bank position performs unexpectedly, Symphony 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 Symphony Environmental will offset losses from the drop in Symphony Environmental's long position.| Metro Bank vs. Capital Metals PLC | Metro Bank vs. GreenX Metals | Metro Bank vs. Monks Investment Trust | Metro Bank vs. Central Asia Metals |
| Symphony Environmental vs. Schroders Investment Trusts | Symphony Environmental vs. GreenX Metals | Symphony Environmental vs. Tavistock Investments Plc | Symphony Environmental vs. Monks Investment Trust |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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