Correlation Between Metropolitan Bank and Ffbw

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Can any of the company-specific risk be diversified away by investing in both Metropolitan Bank and Ffbw 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 Ffbw 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 Ffbw Inc, you can compare the effects of market volatilities on Metropolitan Bank and Ffbw 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 Ffbw. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Bank and Ffbw.

Diversification Opportunities for Metropolitan Bank and Ffbw

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Metropolitan and Ffbw is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Bank Holding and Ffbw Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ffbw Inc 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 Ffbw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ffbw Inc has no effect on the direction of Metropolitan Bank i.e., Metropolitan Bank and Ffbw go up and down completely randomly.

Pair Corralation between Metropolitan Bank and Ffbw

If you would invest  1,178  in Ffbw Inc on December 29, 2023 and sell it today you would earn a total of  0.00  from holding Ffbw Inc or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

Metropolitan Bank Holding  vs.  Ffbw Inc

 Performance 
       Timeline  
Metropolitan Bank Holding 

Risk-Adjusted Performance

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Over the last 90 days Metropolitan Bank Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating 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.
Ffbw Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Ffbw Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental drivers, Ffbw is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Metropolitan Bank and Ffbw Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Metropolitan Bank and Ffbw

The main advantage of trading using opposite Metropolitan Bank and Ffbw positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Bank position performs unexpectedly, Ffbw 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 Ffbw will offset losses from the drop in Ffbw's long position.
The idea behind Metropolitan Bank Holding and Ffbw Inc 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.

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