Correlation Between Anoto Group and MetLife
Can any of the company-specific risk be diversified away by investing in both Anoto Group 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 Anoto Group and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anoto Group AB and MetLife, you can compare the effects of market volatilities on Anoto Group 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 Anoto Group with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anoto Group and MetLife.
Diversification Opportunities for Anoto Group and MetLife
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Anoto and MetLife is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Anoto Group AB and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Anoto Group 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 Anoto Group AB 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 Anoto Group i.e., Anoto Group and MetLife go up and down completely randomly.
Pair Corralation between Anoto Group and MetLife
Assuming the 90 days trading horizon Anoto Group AB is expected to under-perform the MetLife. In addition to that, Anoto Group is 2.31 times more volatile than MetLife. It trades about -0.04 of its total potential returns per unit of risk. MetLife is currently generating about 0.02 per unit of volatility. If you would invest 6,409 in MetLife on January 24, 2024 and sell it today you would earn a total of 787.00 from holding MetLife or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Anoto Group AB vs. MetLife
Performance |
| Timeline |
| Anoto Group AB |
| MetLife |
Anoto Group and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anoto Group and MetLife
The main advantage of trading using opposite Anoto Group and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anoto Group 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.| Anoto Group vs. Precise Biometrics AB | Anoto Group vs. Fingerprint Cards AB | Anoto Group vs. BioInvent International AB |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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