Correlation Between Intuitive Investments and Metro Bank

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

By analyzing existing cross correlation between Intuitive Investments Group and Metro Bank PLC, you can compare the effects of market volatilities on Intuitive Investments and Metro Bank 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 Intuitive Investments with a short position of Metro Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Investments and Metro Bank.

Diversification Opportunities for Intuitive Investments and Metro Bank

-0.7

Correlation Coefficient

Intuitive Investments  Metro Bank

Excellent diversification

The 3 months correlation between Intuitive and Metro is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group and Metro Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Bank PLC and Intuitive Investments 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 Intuitive Investments Group are associated (or correlated) with Metro Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Bank PLC has no effect on the direction of Intuitive Investments i.e., Intuitive Investments and Metro Bank go up and down completely randomly.

Pair Corralation between Intuitive Investments and Metro Bank

Assuming the 90 days trading horizon Intuitive Investments Group is expected to generate 1.23 times more return on investment than Metro Bank. However, Intuitive Investments is 1.23 times more volatile than Metro Bank PLC. It trades about 0.07 of its potential returns per unit of risk. Metro Bank PLC is currently generating about 0.06 per unit of risk. If you would invest  12,450  in Intuitive Investments Group on October 9, 2024 and sell it today you would earn a total of  450.00  from holding Intuitive Investments Group or generate 3.61% return on investment over 90 days.

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

Intuitive Investments Group  vs.  Metro Bank PLC

Intuitive Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Intuitive Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Metro Bank PLC

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Metro Bank PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Metro Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intuitive Investments and Metro Bank

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

The idea behind Intuitive Investments Group and Metro Bank PLC 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.