Correlation Between UTG and MetLife Preferred

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

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

Diversification Opportunities for UTG and MetLife Preferred

0.0

Correlation Coefficient

UTG  MetLife Preferred

Pay attention - limited upside

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

Pair Corralation between UTG and MetLife Preferred

If you would invest (100.00) in UTG Inc on December 29, 2024 and sell it today you would earn a total of  100.00  from holding UTG Inc or generate -100.0% return on investment over 90 days.

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

UTG Inc  vs.  MetLife Preferred Stock

UTG Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days UTG Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, UTG is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

MetLife Preferred Stock

Risk-Adjusted Performance

Very Weak

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

Pair Trading with UTG and MetLife Preferred

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

The idea behind UTG Inc and MetLife Preferred Stock 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.