Correlation Between MetLife and Anson Resources

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

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

Diversification Opportunities for MetLife and Anson Resources

-0.47

Correlation Coefficient

MetLife  Anson Resources

Very good diversification

The 3 months correlation between MetLife and Anson is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Anson Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anson Resources and MetLife 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 MetLife are associated (or correlated) with Anson Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anson Resources has no effect on the direction of MetLife i.e., MetLife and Anson Resources go up and down completely randomly.

Pair Corralation between MetLife and Anson Resources

Considering the 90-day investment horizon MetLife is expected to generate 0.2 times more return on investment than Anson Resources. However, MetLife is 4.98 times less risky than Anson Resources. It trades about 0.04 of its potential returns per unit of risk. Anson Resources Limited is currently generating about 0.01 per unit of risk. If you would invest  6,865  in MetLife on September 3, 2024 and sell it today you would earn a total of  1,958  from holding MetLife or generate 28.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

MetLife  vs.  Anson Resources Limited

MetLife

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MetLife are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, MetLife unveiled solid returns over the last few months and may actually be approaching a breakup point.

Anson Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anson Resources Limited 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with MetLife and Anson Resources

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

The idea behind MetLife and Anson Resources Limited 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.