Correlation Between Sitka Gold and MetLife
Can any of the company-specific risk be diversified away by investing in both Sitka Gold and MetLife 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 Sitka Gold and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sitka Gold Corp and MetLife, you can compare the effects of market volatilities on Sitka Gold and MetLife 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 Sitka Gold with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitka Gold and MetLife.
Diversification Opportunities for Sitka Gold and MetLife
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sitka and MetLife is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sitka Gold Corp and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Sitka Gold 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 Sitka Gold Corp are associated (or correlated) with MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of Sitka Gold i.e., Sitka Gold and MetLife go up and down completely randomly.
Pair Corralation between Sitka Gold and MetLife
Assuming the 90 days horizon Sitka Gold Corp is expected to under-perform the MetLife. In addition to that, Sitka Gold is 2.86 times more volatile than MetLife. It trades about -0.12 of its total potential returns per unit of risk. MetLife is currently generating about 0.16 per unit of volatility. If you would invest 8,225 in MetLife on August 30, 2024 and sell it today you would earn a total of 600.00 from holding MetLife or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitka Gold Corp vs. MetLife
Performance |
| Timeline |
| Sitka Gold Corp |
| MetLife |
Sitka Gold and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitka Gold and MetLife
The main advantage of trading using opposite Sitka Gold and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitka Gold position performs unexpectedly, MetLife 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 MetLife will offset losses from the drop in MetLife's long position.| Sitka Gold vs. Aurion Resources | Sitka Gold vs. Minera Alamos | Sitka Gold vs. Rio2 Limited | Sitka Gold vs. Roscan Gold Corp |
| MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial Corp | MetLife vs. Prudential Financial |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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