Correlation Between MetLife and Intel
Can any of the company-specific risk be diversified away by investing in both MetLife and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and Intel, you can compare the effects of market volatilities on MetLife and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and Intel.
Diversification Opportunities for MetLife and Intel
Good diversification
The 3 months correlation between MetLife and Intel is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of MetLife i.e., MetLife and Intel go up and down completely randomly.
Pair Corralation between MetLife and Intel
Considering the 90-day investment horizon MetLife is expected to generate 0.64 times more return on investment than Intel. However, MetLife is 1.56 times less risky than Intel. It trades about 0.03 of its potential returns per unit of risk. Intel is currently generating about 0.0 per unit of risk. If you would invest 6,337 in MetLife on January 26, 2024 and sell it today you would earn a total of 935.00 from holding MetLife or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetLife vs. Intel
Performance |
| Timeline |
| MetLife |
| Intel |
MetLife and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and Intel
The main advantage of trading using opposite MetLife and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial Corp |
| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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