Correlation Between BG Staffing and MetLife
Can any of the company-specific risk be diversified away by investing in both BG Staffing and MetLife 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 BG Staffing and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BG Staffing and MetLife, you can compare the effects of market volatilities on BG Staffing and MetLife 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 BG Staffing with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of BG Staffing and MetLife.
Diversification Opportunities for BG Staffing and MetLife
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BGSF and MetLife is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding BG Staffing and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and BG Staffing 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 BG Staffing are associated (or correlated) with MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of BG Staffing i.e., BG Staffing and MetLife go up and down completely randomly.
Pair Corralation between BG Staffing and MetLife
Given the investment horizon of 90 days BG Staffing is expected to generate 10.91 times less return on investment than MetLife. In addition to that, BG Staffing is 1.32 times more volatile than MetLife. It trades about 0.0 of its total potential returns per unit of risk. MetLife is currently generating about 0.06 per unit of volatility. If you would invest 5,837 in MetLife on January 19, 2024 and sell it today you would earn a total of 1,158 from holding MetLife or generate 19.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BG Staffing vs. MetLife
Performance |
| Timeline |
| BG Staffing |
| MetLife |
BG Staffing and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BG Staffing and MetLife
The main advantage of trading using opposite BG Staffing and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BG Staffing position performs unexpectedly, MetLife 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 will offset losses from the drop in MetLife's long position.| BG Staffing vs. Kelly Services A | BG Staffing vs. Korn Ferry | BG Staffing vs. Heidrick Struggles International | BG Staffing vs. Hudson Global |
| MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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