Correlation Between MetLife and US Physical
Can any of the company-specific risk be diversified away by investing in both MetLife and US Physical 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 MetLife and US Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and US Physical Therapy, you can compare the effects of market volatilities on MetLife and US Physical 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 MetLife with a short position of US Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and US Physical.
Diversification Opportunities for MetLife and US Physical
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MetLife and UPH is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and US Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Physical Therapy and MetLife 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 MetLife are associated (or correlated) with US Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Physical Therapy has no effect on the direction of MetLife i.e., MetLife and US Physical go up and down completely randomly.
Pair Corralation between MetLife and US Physical
Assuming the 90 days horizon MetLife is expected to generate 1.34 times more return on investment than US Physical. However, MetLife is 1.34 times more volatile than US Physical Therapy. It trades about 0.16 of its potential returns per unit of risk. US Physical Therapy is currently generating about -0.14 per unit of risk. If you would invest 7,860 in MetLife on October 25, 2024 and sell it today you would earn a total of 358.00 from holding MetLife or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
MetLife vs. US Physical Therapy
Performance |
| Timeline |
| MetLife |
| US Physical Therapy |
MetLife and US Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and US Physical
The main advantage of trading using opposite MetLife and US Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, US Physical 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 US Physical will offset losses from the drop in US Physical's long position.| MetLife vs. Pure Storage | MetLife vs. NTT DATA | MetLife vs. INTER CARS SA | MetLife vs. DATADOT TECHNOLOGY |
| US Physical vs. Fresenius Medical Care | US Physical vs. Chemed | US Physical vs. Superior Plus Corp | US Physical vs. Origin Agritech |
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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