Correlation Between Averbuch Formica and MetLife
Can any of the company-specific risk be diversified away by investing in both Averbuch Formica 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 Averbuch Formica and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Averbuch Formica Center and MetLife, you can compare the effects of market volatilities on Averbuch Formica 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 Averbuch Formica with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Averbuch Formica and MetLife.
Diversification Opportunities for Averbuch Formica and MetLife
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Averbuch and MetLife is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Averbuch Formica Center and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Averbuch Formica 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 Averbuch Formica Center 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 Averbuch Formica i.e., Averbuch Formica and MetLife go up and down completely randomly.
Pair Corralation between Averbuch Formica and MetLife
Assuming the 90 days trading horizon Averbuch Formica Center is expected to under-perform the MetLife. In addition to that, Averbuch Formica is 2.93 times more volatile than MetLife. It trades about -0.09 of its total potential returns per unit of risk. MetLife is currently generating about 0.06 per unit of volatility. If you would invest 5,919 in MetLife on January 26, 2024 and sell it today you would earn a total of 1,353 from holding MetLife or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 80.65% |
| Values | Daily Returns |
Averbuch Formica Center vs. MetLife
Performance |
| Timeline |
| Averbuch Formica Center |
| MetLife |
Averbuch Formica and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Averbuch Formica and MetLife
The main advantage of trading using opposite Averbuch Formica and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Averbuch Formica 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.| Averbuch Formica vs. Alony Hetz Properties | Averbuch Formica vs. Melisron | Averbuch Formica vs. Shufersal | Averbuch Formica vs. Israel Discount Bank |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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