Correlation Between Fidelity National and MetLife
Can any of the company-specific risk be diversified away by investing in both Fidelity National 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 Fidelity National and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Information and MetLife, you can compare the effects of market volatilities on Fidelity National 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 Fidelity National with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and MetLife.
Diversification Opportunities for Fidelity National and MetLife
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and MetLife is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Fidelity National 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 Fidelity National Information 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 Fidelity National i.e., Fidelity National and MetLife go up and down completely randomly.
Pair Corralation between Fidelity National and MetLife
Assuming the 90 days trading horizon Fidelity National is expected to generate 1.07 times less return on investment than MetLife. But when comparing it to its historical volatility, Fidelity National Information is 1.09 times less risky than MetLife. It trades about 0.09 of its potential returns per unit of risk. MetLife is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,032 in MetLife on September 12, 2024 and sell it today you would earn a total of 2,716 from holding MetLife or generate 53.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. MetLife
Performance |
| Timeline |
| Fidelity National |
| MetLife |
Fidelity National and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and MetLife
The main advantage of trading using opposite Fidelity National and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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.| Fidelity National vs. Apple Inc | Fidelity National vs. Apple Inc | Fidelity National vs. Apple Inc | Fidelity National vs. Apple Inc |
| MetLife vs. Corporate Travel Management | MetLife vs. Coor Service Management | MetLife vs. Brockhaus Capital Management | MetLife vs. Fidelity National Information |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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