Correlation Between NiHAO Mineral and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both NiHAO Mineral and Metropolitan Bank 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 NiHAO Mineral and Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiHAO Mineral Resources and Metropolitan Bank Trust, you can compare the effects of market volatilities on NiHAO Mineral and Metropolitan Bank 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 NiHAO Mineral with a short position of Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiHAO Mineral and Metropolitan Bank.
Diversification Opportunities for NiHAO Mineral and Metropolitan Bank
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NiHAO and Metropolitan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding NiHAO Mineral Resources and Metropolitan Bank Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Bank Trust and NiHAO Mineral 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 NiHAO Mineral Resources are associated (or correlated) with Metropolitan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Bank Trust has no effect on the direction of NiHAO Mineral i.e., NiHAO Mineral and Metropolitan Bank go up and down completely randomly.
Pair Corralation between NiHAO Mineral and Metropolitan Bank
Assuming the 90 days trading horizon NiHAO Mineral Resources is expected to under-perform the Metropolitan Bank. In addition to that, NiHAO Mineral is 3.02 times more volatile than Metropolitan Bank Trust. It trades about -0.17 of its total potential returns per unit of risk. Metropolitan Bank Trust is currently generating about -0.13 per unit of volatility. If you would invest 7,690 in Metropolitan Bank Trust on September 22, 2024 and sell it today you would lose (380.00) from holding Metropolitan Bank Trust or give up 4.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 40.91% |
| Values | Daily Returns |
NiHAO Mineral Resources vs. Metropolitan Bank Trust
Performance |
| Timeline |
| NiHAO Mineral Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Metropolitan Bank Trust |
NiHAO Mineral and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiHAO Mineral and Metropolitan Bank
The main advantage of trading using opposite NiHAO Mineral and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiHAO Mineral position performs unexpectedly, Metropolitan Bank 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 Metropolitan Bank will offset losses from the drop in Metropolitan Bank's long position.| NiHAO Mineral vs. Manila Mining Corp | NiHAO Mineral vs. Robinsons Retail Holdings | NiHAO Mineral vs. Atlas Consolidated Mining | NiHAO Mineral vs. Jollibee Foods Corp |
| Metropolitan Bank vs. BDO Unibank | Metropolitan Bank vs. Union Bank of | Metropolitan Bank vs. Philippine National Bank | Metropolitan Bank vs. Asia United Bank |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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