Correlation Between FG Annuities and MetLife

Can any of the company-specific risk be diversified away by investing in both FG Annuities 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 FG Annuities and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FG Annuities Life and MetLife, you can compare the effects of market volatilities on FG Annuities 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 FG Annuities with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Annuities and MetLife.

Diversification Opportunities for FG Annuities and MetLife

-0.46

Correlation Coefficient

FG Annuities  MetLife

Very good diversification

The 3 months correlation between FG Annuities and MetLife is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding FG Annuities Life and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and FG Annuities 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 FG Annuities Life 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 FG Annuities i.e., FG Annuities and MetLife go up and down completely randomly.

Pair Corralation between FG Annuities and MetLife

Allowing for the 90-day total investment horizon FG Annuities Life is expected to under-perform the MetLife. In addition to that, FG Annuities is 2.62 times more volatile than MetLife. It trades about -0.05 of its total potential returns per unit of risk. MetLife is currently generating about 0.11 per unit of volatility. If you would invest  6,933  in MetLife on January 24, 2024 and sell it today you would earn a total of  263.00  from holding MetLife or generate 3.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

FG Annuities Life  vs.  MetLife

FG Annuities Life

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FG Annuities Life has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MetLife

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MetLife are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, MetLife is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FG Annuities and MetLife

The main advantage of trading using opposite FG Annuities and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Annuities 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.

The idea behind FG Annuities Life and MetLife pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.