Correlation Between Intel and MetLife
Can any of the company-specific risk be diversified away by investing in both Intel 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 Intel and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and MetLife, you can compare the effects of market volatilities on Intel 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 Intel with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and MetLife.
Diversification Opportunities for Intel and MetLife
Very good diversification
The 3 months correlation between Intel and MetLife is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Intel and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Intel 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 Intel 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 Intel i.e., Intel and MetLife go up and down completely randomly.
Pair Corralation between Intel and MetLife
Given the investment horizon of 90 days Intel is expected to under-perform the MetLife. In addition to that, Intel is 3.14 times more volatile than MetLife. It trades about -0.22 of its total potential returns per unit of risk. MetLife is currently generating about 0.1 per unit of volatility. If you would invest 6,862 in MetLife on January 21, 2024 and sell it today you would earn a total of 249.00 from holding MetLife or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. MetLife
Performance |
| Timeline |
| Intel |
| MetLife |
Intel and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and MetLife
The main advantage of trading using opposite Intel and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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