Correlation Between MetLife and WH Group
Can any of the company-specific risk be diversified away by investing in both MetLife and WH Group 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 WH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and WH Group Limited, you can compare the effects of market volatilities on MetLife and WH Group 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 WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and WH Group.
Diversification Opportunities for MetLife and WH Group
Poor diversification
The 3 months correlation between MetLife and WHGRF is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and WH Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group Limited 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 WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group Limited has no effect on the direction of MetLife i.e., MetLife and WH Group go up and down completely randomly.
Pair Corralation between MetLife and WH Group
Considering the 90-day investment horizon MetLife is expected to generate 1.29 times more return on investment than WH Group. However, MetLife is 1.29 times more volatile than WH Group Limited. It trades about 0.16 of its potential returns per unit of risk. WH Group Limited is currently generating about 0.2 per unit of risk. If you would invest 7,356 in MetLife on September 6, 2024 and sell it today you would earn a total of 1,182 from holding MetLife or generate 16.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
MetLife vs. WH Group Limited
Performance |
Timeline |
MetLife |
WH Group Limited |
MetLife and WH Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MetLife and WH Group
The main advantage of trading using opposite MetLife and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, WH Group 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 WH Group will offset losses from the drop in WH Group's long position.MetLife vs. Aflac Incorporated | MetLife vs. Manulife Financial Corp | MetLife vs. Jackson Financial | MetLife vs. CNO Financial Group |
WH Group vs. Premier Foods Plc | WH Group vs. Torque Lifestyle Brands | WH Group vs. Naturally Splendid Enterprises | WH Group vs. Aryzta AG PK |
Check out your portfolio center.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |