Correlation Between MetLife and Thunderbird Entertainment

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

By analyzing existing cross correlation between MetLife and Thunderbird Entertainment Group, you can compare the effects of market volatilities on MetLife and Thunderbird Entertainment 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 Thunderbird Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and Thunderbird Entertainment.

Diversification Opportunities for MetLife and Thunderbird Entertainment

-0.31

Correlation Coefficient

MetLife  Thunderbird Entertainment

Very good diversification

The 3 months correlation between MetLife and Thunderbird is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Thunderbird Entertainment Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderbird Entertainment 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 Thunderbird Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderbird Entertainment has no effect on the direction of MetLife i.e., MetLife and Thunderbird Entertainment go up and down completely randomly.

Pair Corralation between MetLife and Thunderbird Entertainment

Considering the 90-day investment horizon MetLife is expected to generate 0.45 times more return on investment than Thunderbird Entertainment. However, MetLife is 2.23 times less risky than Thunderbird Entertainment. It trades about 0.0 of its potential returns per unit of risk. Thunderbird Entertainment Group is currently generating about -0.03 per unit of risk. If you would invest  8,632  in MetLife on December 1, 2024 and sell it today you would lose (14.00) from holding MetLife or give up 0.16% of portfolio value over 90 days.

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

MetLife  vs.  Thunderbird Entertainment Grou

MetLife

Risk-Adjusted Performance

Very Weak

Over the last 90 days MetLife has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Thunderbird Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thunderbird Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Thunderbird Entertainment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MetLife and Thunderbird Entertainment

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

The idea behind MetLife and Thunderbird Entertainment 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.