Correlation Between SupplyMe Capital and Metro Bank
Can any of the company-specific risk be diversified away by investing in both SupplyMe Capital and Metro 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 SupplyMe Capital and Metro Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SupplyMe Capital PLC and Metro Bank PLC, you can compare the effects of market volatilities on SupplyMe Capital and Metro 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 SupplyMe Capital with a short position of Metro Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SupplyMe Capital and Metro Bank.
Diversification Opportunities for SupplyMe Capital and Metro Bank
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SupplyMe and Metro is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and Metro Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Bank PLC and SupplyMe Capital 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 SupplyMe Capital PLC are associated (or correlated) with Metro Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Bank PLC has no effect on the direction of SupplyMe Capital i.e., SupplyMe Capital and Metro Bank go up and down completely randomly.
Pair Corralation between SupplyMe Capital and Metro Bank
Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to under-perform the Metro Bank. In addition to that, SupplyMe Capital is 2.53 times more volatile than Metro Bank PLC. It trades about -0.23 of its total potential returns per unit of risk. Metro Bank PLC is currently generating about -0.07 per unit of volatility. If you would invest 9,580 in Metro Bank PLC on October 25, 2024 and sell it today you would lose (330.00) from holding Metro Bank PLC or give up 3.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SupplyMe Capital PLC vs. Metro Bank PLC
Performance |
| Timeline |
| SupplyMe Capital PLC |
| Metro Bank PLC |
SupplyMe Capital and Metro Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SupplyMe Capital and Metro Bank
The main advantage of trading using opposite SupplyMe Capital and Metro Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SupplyMe Capital position performs unexpectedly, Metro 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 Metro Bank will offset losses from the drop in Metro Bank's long position.| SupplyMe Capital vs. Ecofin Global Utilities | SupplyMe Capital vs. URU Metals | SupplyMe Capital vs. European Metals Holdings | SupplyMe Capital vs. Rheinmetall AG |
| Metro Bank vs. Livermore Investments Group | Metro Bank vs. Applied Materials | Metro Bank vs. Chrysalis Investments | Metro Bank vs. Nordic Semiconductor ASA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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