Correlation Between Safe T and MetLife
Can any of the company-specific risk be diversified away by investing in both Safe T 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 Safe T and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe T Group and MetLife, you can compare the effects of market volatilities on Safe T 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 Safe T with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe T and MetLife.
Diversification Opportunities for Safe T and MetLife
Very weak diversification
The 3 months correlation between Safe and MetLife is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Safe T Group and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Safe T 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 Safe T Group 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 Safe T i.e., Safe T and MetLife go up and down completely randomly.
Pair Corralation between Safe T and MetLife
Assuming the 90 days trading horizon Safe T Group is expected to generate 4.11 times more return on investment than MetLife. However, Safe T is 4.11 times more volatile than MetLife. It trades about 0.09 of its potential returns per unit of risk. MetLife is currently generating about 0.02 per unit of risk. If you would invest 21,000 in Safe T Group on January 24, 2024 and sell it today you would earn a total of 64,200 from holding Safe T Group or generate 305.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.79% |
| Values | Daily Returns |
Safe T Group vs. MetLife
Performance |
| Timeline |
| Safe T Group |
| MetLife |
Safe T and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe T and MetLife
The main advantage of trading using opposite Safe T and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe T 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.| Safe T vs. One Software Technologies | Safe T vs. Abra Information Technologies | Safe T vs. Synel MLL Payway | Safe T vs. Ai Conversation Systems |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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