Correlation Between Metro and VIP Entertainment

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

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

Diversification Opportunities for Metro and VIP Entertainment

0.0

Correlation Coefficient

Metro  VIP Entertainment

Pay attention - limited upside

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

Pair Corralation between Metro and VIP Entertainment

If you would invest  8,269  in Metro Inc on September 1, 2024 and sell it today you would earn a total of  854.00  from holding Metro Inc or generate 10.33% return on investment over 90 days.

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

Metro Inc  vs.  VIP Entertainment Technologies

Metro Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Metro Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Metro may actually be approaching a critical reversion point that can send shares even higher in December 2024.

VIP Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIP Entertainment Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, VIP Entertainment is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Metro and VIP Entertainment

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

The idea behind Metro Inc and VIP Entertainment Technologies 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.