Correlation Between Top Frontier and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both Top Frontier 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 Top Frontier and Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Frontier Investment and Metropolitan Bank Trust, you can compare the effects of market volatilities on Top Frontier 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 Top Frontier with a short position of Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Frontier and Metropolitan Bank.
Diversification Opportunities for Top Frontier and Metropolitan Bank
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Top and Metropolitan is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Top Frontier Investment 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 Top Frontier 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 Top Frontier Investment 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 Top Frontier i.e., Top Frontier and Metropolitan Bank go up and down completely randomly.
Pair Corralation between Top Frontier and Metropolitan Bank
Assuming the 90 days trading horizon Top Frontier Investment is expected to generate 1.35 times more return on investment than Metropolitan Bank. However, Top Frontier is 1.35 times more volatile than Metropolitan Bank Trust. It trades about 0.02 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 6,770 in Top Frontier Investment on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Top Frontier Investment or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Top Frontier Investment vs. Metropolitan Bank Trust
Performance |
| Timeline |
| Top Frontier Investment |
| Metropolitan Bank Trust |
Top Frontier and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Frontier and Metropolitan Bank
The main advantage of trading using opposite Top Frontier and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Frontier 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.| Top Frontier vs. Allhome Corp | Top Frontier vs. Jollibee Foods Corp | Top Frontier vs. LFM Properties Corp | Top Frontier vs. Altus Property Ventures |
| Metropolitan Bank vs. Crown Asia Chemicals | Metropolitan Bank vs. Jollibee Foods Corp | Metropolitan Bank vs. Security Bank Corp | Metropolitan Bank vs. Semirara Mining 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |