Correlation Between Abacus Life and MetLife Preferred
Can any of the company-specific risk be diversified away by investing in both Abacus Life and MetLife Preferred 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 Abacus Life and MetLife Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abacus Life and MetLife Preferred Stock, you can compare the effects of market volatilities on Abacus Life and MetLife Preferred 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 Abacus Life with a short position of MetLife Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abacus Life and MetLife Preferred.
Diversification Opportunities for Abacus Life and MetLife Preferred
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Abacus and MetLife is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Abacus Life and MetLife Preferred Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife Preferred Stock and Abacus Life 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 Abacus Life are associated (or correlated) with MetLife Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife Preferred Stock has no effect on the direction of Abacus Life i.e., Abacus Life and MetLife Preferred go up and down completely randomly.
Pair Corralation between Abacus Life and MetLife Preferred
Considering the 90-day investment horizon Abacus Life is expected to generate 3.27 times more return on investment than MetLife Preferred. However, Abacus Life is 3.27 times more volatile than MetLife Preferred Stock. It trades about 0.03 of its potential returns per unit of risk. MetLife Preferred Stock is currently generating about 0.07 per unit of risk. If you would invest 997.00 in Abacus Life on February 4, 2024 and sell it today you would earn a total of 209.00 from holding Abacus Life or generate 20.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Abacus Life vs. MetLife Preferred Stock
Performance |
Timeline |
Abacus Life |
MetLife Preferred Stock |
Abacus Life and MetLife Preferred Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Abacus Life and MetLife Preferred
The main advantage of trading using opposite Abacus Life and MetLife Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abacus Life position performs unexpectedly, MetLife Preferred 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 Preferred will offset losses from the drop in MetLife Preferred's long position.Abacus Life vs. FG Annuities Life | Abacus Life vs. Globe Life | Abacus Life vs. Vericity | Abacus Life vs. MetLife Preferred Stock |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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