Correlation Between Metro AG and CVB Financial

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

By analyzing existing cross correlation between Metro AG and CVB Financial Corp, you can compare the effects of market volatilities on Metro AG and CVB Financial 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 Metro AG with a short position of CVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro AG and CVB Financial.

Diversification Opportunities for Metro AG and CVB Financial

0.0

Correlation Coefficient

Metro AG  CVB Financial

Pay attention - limited upside

The 3 months correlation between Metro and CVB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Metro AG and CVB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVB Financial Corp and Metro AG 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 Metro AG are associated (or correlated) with CVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVB Financial Corp has no effect on the direction of Metro AG i.e., Metro AG and CVB Financial go up and down completely randomly.

Pair Corralation between Metro AG and CVB Financial

If you would invest  0.00  in Metro AG on December 20, 2024 and sell it today you would earn a total of  0.00  from holding Metro AG or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Metro AG  vs.  CVB Financial Corp

Metro AG

Risk-Adjusted Performance

OK

Over the last 90 days Metro AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Metro AG is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CVB Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CVB Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Metro AG and CVB Financial

The main advantage of trading using opposite Metro AG and CVB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro AG position performs unexpectedly, CVB Financial 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 CVB Financial will offset losses from the drop in CVB Financial's long position.

The idea behind Metro AG and CVB Financial Corp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.