Correlation Between GOLDMAN and MetLife
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By analyzing existing cross correlation between GOLDMAN SACHS GROUP and MetLife, you can compare the effects of market volatilities on GOLDMAN 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 GOLDMAN with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN and MetLife.
Diversification Opportunities for GOLDMAN and MetLife
Very weak diversification
The 3 months correlation between GOLDMAN and MetLife is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS GROUP and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and GOLDMAN 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 GOLDMAN SACHS GROUP 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 GOLDMAN i.e., GOLDMAN and MetLife go up and down completely randomly.
Pair Corralation between GOLDMAN and MetLife
Assuming the 90 days trading horizon GOLDMAN SACHS GROUP is expected to under-perform the MetLife. In addition to that, GOLDMAN is 1.16 times more volatile than MetLife. It trades about -0.08 of its total potential returns per unit of risk. MetLife is currently generating about 0.14 per unit of volatility. If you would invest 7,722 in MetLife on September 3, 2024 and sell it today you would earn a total of 1,101 from holding MetLife or generate 14.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 43.75% |
| Values | Daily Returns |
GOLDMAN SACHS GROUP vs. MetLife
Performance |
| Timeline |
| GOLDMAN SACHS GROUP |
| MetLife |
GOLDMAN and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLDMAN and MetLife
The main advantage of trading using opposite GOLDMAN and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDMAN 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.The idea behind GOLDMAN SACHS GROUP and MetLife pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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