Correlation Between Metro AG and DISTRICT METALS
Can any of the company-specific risk be diversified away by investing in both Metro AG and DISTRICT METALS 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 DISTRICT METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro AG and DISTRICT METALS, you can compare the effects of market volatilities on Metro AG and DISTRICT METALS 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 DISTRICT METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro AG and DISTRICT METALS.
Diversification Opportunities for Metro AG and DISTRICT METALS
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Metro and DISTRICT is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Metro AG and DISTRICT METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISTRICT METALS 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 DISTRICT METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISTRICT METALS has no effect on the direction of Metro AG i.e., Metro AG and DISTRICT METALS go up and down completely randomly.
Pair Corralation between Metro AG and DISTRICT METALS
Assuming the 90 days trading horizon Metro AG is expected to generate 1.08 times more return on investment than DISTRICT METALS. However, Metro AG is 1.08 times more volatile than DISTRICT METALS. It trades about 0.06 of its potential returns per unit of risk. DISTRICT METALS is currently generating about -0.05 per unit of risk. If you would invest 482.00 in Metro AG on December 29, 2024 and sell it today you would earn a total of 53.00 from holding Metro AG or generate 11.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Metro AG vs. DISTRICT METALS
Performance |
Timeline |
Metro AG |
DISTRICT METALS |
Metro AG and DISTRICT METALS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Metro AG and DISTRICT METALS
The main advantage of trading using opposite Metro AG and DISTRICT METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro AG position performs unexpectedly, DISTRICT METALS 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 DISTRICT METALS will offset losses from the drop in DISTRICT METALS's long position.Metro AG vs. TELECOM ITALRISP ADR10 | Metro AG vs. Air New Zealand | Metro AG vs. INTERSHOP Communications Aktiengesellschaft | Metro AG vs. Wizz Air Holdings |
DISTRICT METALS vs. CompuGroup Medical SE | DISTRICT METALS vs. Medical Properties Trust | DISTRICT METALS vs. G8 EDUCATION | DISTRICT METALS vs. CAREER EDUCATION |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Share Portfolio Track or share privately all of your investments from the convenience of any device |