Correlation Between Colas SA and MetLife
Can any of the company-specific risk be diversified away by investing in both Colas SA 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 Colas SA and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colas SA and MetLife, you can compare the effects of market volatilities on Colas SA 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 Colas SA with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colas SA and MetLife.
Diversification Opportunities for Colas SA and MetLife
Very weak diversification
The 3 months correlation between Colas and MetLife is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Colas SA and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Colas SA 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 Colas SA 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 Colas SA i.e., Colas SA and MetLife go up and down completely randomly.
Pair Corralation between Colas SA and MetLife
Allowing for the 90-day total investment horizon Colas SA is expected to generate 1.14 times more return on investment than MetLife. However, Colas SA is 1.14 times more volatile than MetLife. It trades about 0.06 of its potential returns per unit of risk. MetLife is currently generating about 0.02 per unit of risk. If you would invest 27,678 in Colas SA on January 20, 2024 and sell it today you would earn a total of 9,392 from holding Colas SA or generate 33.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 67.93% |
| Values | Daily Returns |
Colas SA vs. MetLife
Performance |
| Timeline |
| Colas SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MetLife |
Colas SA and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colas SA and MetLife
The main advantage of trading using opposite Colas SA and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colas SA 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.| Colas SA vs. Reinsurance Group of | Colas SA vs. Siriuspoint | Colas SA vs. Brookfield Reinsurance | Colas SA vs. RenaissanceRe Holdings |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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