Correlation Between Bavarian Nordic and MetLife
Can any of the company-specific risk be diversified away by investing in both Bavarian Nordic 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 Bavarian Nordic and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bavarian Nordic and MetLife, you can compare the effects of market volatilities on Bavarian Nordic 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 Bavarian Nordic with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and MetLife.
Diversification Opportunities for Bavarian Nordic and MetLife
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bavarian and MetLife is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Bavarian Nordic 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 Bavarian Nordic 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 Bavarian Nordic i.e., Bavarian Nordic and MetLife go up and down completely randomly.
Pair Corralation between Bavarian Nordic and MetLife
Assuming the 90 days trading horizon Bavarian Nordic is expected to under-perform the MetLife. In addition to that, Bavarian Nordic is 3.03 times more volatile than MetLife. It trades about -0.15 of its total potential returns per unit of risk. MetLife is currently generating about 0.17 per unit of volatility. If you would invest 6,857 in MetLife on January 25, 2024 and sell it today you would earn a total of 396.00 from holding MetLife or generate 5.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Bavarian Nordic vs. MetLife
Performance |
Timeline |
Bavarian Nordic |
MetLife |
Bavarian Nordic and MetLife Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bavarian Nordic and MetLife
The main advantage of trading using opposite Bavarian Nordic and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bavarian Nordic 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.Bavarian Nordic vs. Ambu AS | Bavarian Nordic vs. SAS AB | Bavarian Nordic vs. Zealand Pharma AS | Bavarian Nordic vs. Orphazyme AS |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
CEOs Directory Screen CEOs from public companies around the world | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |