Correlation Between MetLife and 693627AY7

Can any of the company-specific risk be diversified away by investing in both MetLife and 693627AY7 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 693627AY7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MetLife and PSI ENERGY INC, you can compare the effects of market volatilities on MetLife and 693627AY7 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 693627AY7. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and 693627AY7.

Diversification Opportunities for MetLife and 693627AY7

0.0

Correlation Coefficient

MetLife  693627AY7

Pay attention - limited upside

The 3 months correlation between MetLife and 693627AY7 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and PSI ENERGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSI ENERGY INC 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 693627AY7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSI ENERGY INC has no effect on the direction of MetLife i.e., MetLife and 693627AY7 go up and down completely randomly.

Pair Corralation between MetLife and 693627AY7

If you would invest  7,604  in MetLife on September 5, 2024 and sell it today you would earn a total of  968.00  from holding MetLife or generate 12.73% return on investment over 90 days.

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

MetLife  vs.  PSI ENERGY INC

MetLife

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MetLife are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, MetLife unveiled solid returns over the last few months and may actually be approaching a breakup point.

PSI ENERGY INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PSI ENERGY INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 693627AY7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MetLife and 693627AY7

The main advantage of trading using opposite MetLife and 693627AY7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, 693627AY7 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 693627AY7 will offset losses from the drop in 693627AY7's long position.

The idea behind MetLife and PSI ENERGY INC 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..