Correlation Between Arthur J and Meta Financial

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

By analyzing existing cross correlation between Arthur J Gallagher and Meta Financial Group, you can compare the effects of market volatilities on Arthur J and Meta 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 Arthur J with a short position of Meta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arthur J and Meta Financial.

Diversification Opportunities for Arthur J and Meta Financial

0.59

Correlation Coefficient

Arthur J  Meta Financial

Very weak diversification

The 3 months correlation between Arthur and Meta is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Arthur J Gallagher and Meta Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Financial Group and Arthur J 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 Arthur J Gallagher are associated (or correlated) with Meta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Financial Group has no effect on the direction of Arthur J i.e., Arthur J and Meta Financial go up and down completely randomly.

Pair Corralation between Arthur J and Meta Financial

Assuming the 90 days horizon Arthur J is expected to generate 1.15 times less return on investment than Meta Financial. In addition to that, Arthur J is 1.08 times more volatile than Meta Financial Group. It trades about 0.2 of its total potential returns per unit of risk. Meta Financial Group is currently generating about 0.24 per unit of volatility. If you would invest  7,100  in Meta Financial Group on October 23, 2024 and sell it today you would earn a total of  400.00  from holding Meta Financial Group or generate 5.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.12%
Values	Daily Returns

Arthur J Gallagher  vs.  Meta Financial Group

Arthur J Gallagher

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arthur J Gallagher are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Arthur J may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Meta Financial Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Meta Financial Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Meta Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arthur J and Meta Financial

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

The idea behind Arthur J Gallagher and Meta Financial Group 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.