Correlation Between Federal Life and MetLife
Can any of the company-specific risk be diversified away by investing in both Federal Life 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 Federal Life and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Life Group and MetLife, you can compare the effects of market volatilities on Federal Life 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 Federal Life with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Life and MetLife.
Diversification Opportunities for Federal Life and MetLife
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and MetLife is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Federal Life Group and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Federal Life 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 Federal Life Group 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 Federal Life i.e., Federal Life and MetLife go up and down completely randomly.
Pair Corralation between Federal Life and MetLife
If you would invest 6,933 in MetLife on January 24, 2024 and sell it today you would earn a total of 263.00 from holding MetLife or generate 3.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 2.38% |
Values | Daily Returns |
Federal Life Group vs. MetLife
Performance |
Timeline |
Federal Life Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MetLife |
Federal Life and MetLife Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federal Life and MetLife
The main advantage of trading using opposite Federal Life and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Life 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.Federal Life vs. American Equity Investment | Federal Life vs. American Equity Investment | Federal Life vs. American Equity Investment | Federal Life vs. AIA Group |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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