Correlation Between Metropolitan Bank and Esquire Financial

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Metropolitan Bank and Esquire Financial 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 Metropolitan Bank and Esquire Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan Bank Holding and Esquire Financial Holdings, you can compare the effects of market volatilities on Metropolitan Bank and Esquire Financial 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 Metropolitan Bank with a short position of Esquire Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Bank and Esquire Financial.

Diversification Opportunities for Metropolitan Bank and Esquire Financial

0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between Metropolitan and Esquire is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Bank Holding and Esquire Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esquire Financial and Metropolitan Bank 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 Metropolitan Bank Holding are associated (or correlated) with Esquire Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esquire Financial has no effect on the direction of Metropolitan Bank i.e., Metropolitan Bank and Esquire Financial go up and down completely randomly.

Pair Corralation between Metropolitan Bank and Esquire Financial

Considering the 90-day investment horizon Metropolitan Bank Holding is expected to generate 2.28 times more return on investment than Esquire Financial. However, Metropolitan Bank is 2.28 times more volatile than Esquire Financial Holdings. It trades about 0.05 of its potential returns per unit of risk. Esquire Financial Holdings is currently generating about 0.06 per unit of risk. If you would invest  2,877  in Metropolitan Bank Holding on December 30, 2023 and sell it today you would earn a total of  973.00  from holding Metropolitan Bank Holding or generate 33.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Metropolitan Bank Holding  vs.  Esquire Financial Holdings

 Performance 
       Timeline  
Metropolitan Bank Holding 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Metropolitan Bank Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Esquire Financial 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Esquire Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Esquire Financial is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Metropolitan Bank and Esquire Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Metropolitan Bank and Esquire Financial

The main advantage of trading using opposite Metropolitan Bank and Esquire Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Bank position performs unexpectedly, Esquire Financial 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 Esquire Financial will offset losses from the drop in Esquire Financial's long position.
The idea behind Metropolitan Bank Holding and Esquire Financial Holdings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

Other Complementary Tools

Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
AI Investment Finder
Use AI to screen and filter profitable investment opportunities
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Technical Analysis
Check basic technical indicators and analysis based on most latest market data