Correlation Between Canzon Israel and MetLife
Can any of the company-specific risk be diversified away by investing in both Canzon Israel 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 Canzon Israel and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canzon Israel and MetLife, you can compare the effects of market volatilities on Canzon Israel 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 Canzon Israel with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canzon Israel and MetLife.
Diversification Opportunities for Canzon Israel and MetLife
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canzon and MetLife is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Canzon Israel and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Canzon Israel 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 Canzon Israel 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 Canzon Israel i.e., Canzon Israel and MetLife go up and down completely randomly.
Pair Corralation between Canzon Israel and MetLife
Assuming the 90 days trading horizon Canzon Israel is expected to under-perform the MetLife. In addition to that, Canzon Israel is 3.41 times more volatile than MetLife. It trades about -0.06 of its total potential returns per unit of risk. MetLife is currently generating about 0.05 per unit of volatility. If you would invest 6,983 in MetLife on January 25, 2024 and sell it today you would earn a total of 239.00 from holding MetLife or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 79.03% |
| Values | Daily Returns |
Canzon Israel vs. MetLife
Performance |
| Timeline |
| Canzon Israel |
| MetLife |
Canzon Israel and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canzon Israel and MetLife
The main advantage of trading using opposite Canzon Israel and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canzon Israel 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.| Canzon Israel vs. Meitav Dash Investments | Canzon Israel vs. Unet Credit Finance | Canzon Israel vs. IDI Insurance | Canzon Israel vs. Harel Insurance Investments |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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