Correlation Between MetLife and Apple
Can any of the company-specific risk be diversified away by investing in both MetLife and Apple 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 MetLife and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and Apple Inc, you can compare the effects of market volatilities on MetLife and Apple 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 MetLife with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and Apple.
Diversification Opportunities for MetLife and Apple
Pay attention - limited upside
The 3 months correlation between MetLife and Apple is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and MetLife 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 MetLife are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of MetLife i.e., MetLife and Apple go up and down completely randomly.
Pair Corralation between MetLife and Apple
Considering the 90-day investment horizon MetLife is expected to generate 0.91 times more return on investment than Apple. However, MetLife is 1.1 times less risky than Apple. It trades about 0.05 of its potential returns per unit of risk. Apple Inc is currently generating about -0.19 per unit of risk. If you would invest 6,895 in MetLife on January 20, 2024 and sell it today you would earn a total of 216.00 from holding MetLife or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetLife vs. Apple Inc
Performance |
| Timeline |
| MetLife |
| Apple Inc |
MetLife and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and Apple
The main advantage of trading using opposite MetLife and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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