Correlation Between Zillow Group and MetLife
Can any of the company-specific risk be diversified away by investing in both Zillow Group 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 Zillow Group and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zillow Group Class and MetLife, you can compare the effects of market volatilities on Zillow Group 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 Zillow Group with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zillow Group and MetLife.
Diversification Opportunities for Zillow Group and MetLife
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zillow and MetLife is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Zillow Group Class and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Zillow Group 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 Zillow Group Class 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 Zillow Group i.e., Zillow Group and MetLife go up and down completely randomly.
Pair Corralation between Zillow Group and MetLife
Taking into account the 90-day investment horizon Zillow Group Class is expected to under-perform the MetLife. In addition to that, Zillow Group is 2.23 times more volatile than MetLife. It trades about -0.25 of its total potential returns per unit of risk. MetLife is currently generating about -0.02 per unit of volatility. If you would invest 7,306 in MetLife on January 26, 2024 and sell it today you would lose (34.00) from holding MetLife or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zillow Group Class vs. MetLife
Performance |
| Timeline |
| Zillow Group Class |
| MetLife |
Zillow Group and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zillow Group and MetLife
The main advantage of trading using opposite Zillow Group and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zillow Group 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.| Zillow Group vs. Pinterest | Zillow Group vs. Snap Inc | Zillow Group vs. Spotify Technology SA | Zillow Group vs. Twilio Inc |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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