Correlation Between Suntrust Home and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both Suntrust Home 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 Suntrust Home and Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntrust Home Developers and Metropolitan Bank Trust, you can compare the effects of market volatilities on Suntrust Home 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 Suntrust Home with a short position of Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntrust Home and Metropolitan Bank.
Diversification Opportunities for Suntrust Home and Metropolitan Bank
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Suntrust and Metropolitan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Suntrust Home Developers 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 Suntrust Home 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 Suntrust Home Developers 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 Suntrust Home i.e., Suntrust Home and Metropolitan Bank go up and down completely randomly.
Pair Corralation between Suntrust Home and Metropolitan Bank
Assuming the 90 days trading horizon Suntrust Home Developers is expected to generate 0.92 times more return on investment than Metropolitan Bank. However, Suntrust Home Developers is 1.09 times less risky than Metropolitan Bank. It trades about 0.01 of its potential returns per unit of risk. Metropolitan Bank Trust is currently generating about -0.01 per unit of risk. If you would invest 90.00 in Suntrust Home Developers on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Suntrust Home Developers or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
Suntrust Home Developers vs. Metropolitan Bank Trust
Performance |
| Timeline |
| Suntrust Home Developers |
| Metropolitan Bank Trust |
Suntrust Home and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntrust Home and Metropolitan Bank
The main advantage of trading using opposite Suntrust Home and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntrust Home 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.| Suntrust Home vs. Allhome Corp | Suntrust Home vs. Jollibee Foods Corp | Suntrust Home vs. LFM Properties Corp | Suntrust Home vs. PXP Energy Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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