Correlation Between Midwest Holding and MetLife

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

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

Diversification Opportunities for Midwest Holding and MetLife

0.0

Correlation Coefficient

Midwest Holding  MetLife

Pay attention - limited upside

The 3 months correlation between Midwest and MetLife is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Midwest Holding and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Midwest Holding 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 Midwest Holding 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 Midwest Holding i.e., Midwest Holding and MetLife go up and down completely randomly.

Pair Corralation between Midwest Holding and MetLife

If you would invest  8,084  in MetLife on December 20, 2024 and sell it today you would earn a total of  188.00  from holding MetLife or generate 2.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Midwest Holding  vs.  MetLife

Midwest Holding

Risk-Adjusted Performance

Very Weak

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

MetLife

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MetLife are ranked lower than 2 (%) 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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Midwest Holding and MetLife

The main advantage of trading using opposite Midwest Holding and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midwest Holding 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 Midwest Holding 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.