Correlation Between MetLife and Emerge Capital
Can any of the company-specific risk be diversified away by investing in both MetLife and Emerge Capital 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 Emerge Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and Emerge Capital Management, you can compare the effects of market volatilities on MetLife and Emerge Capital 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 Emerge Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and Emerge Capital.
Diversification Opportunities for MetLife and Emerge Capital
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MetLife and Emerge is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Emerge Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerge Capital Management 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 Emerge Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerge Capital Management has no effect on the direction of MetLife i.e., MetLife and Emerge Capital go up and down completely randomly.
Pair Corralation between MetLife and Emerge Capital
If you would invest 2,567 in Emerge Capital Management on January 20, 2024 and sell it today you would earn a total of 0.00 from holding Emerge Capital Management or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
MetLife vs. Emerge Capital Management
Performance |
| Timeline |
| MetLife |
| Emerge Capital Management |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MetLife and Emerge Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and Emerge Capital
The main advantage of trading using opposite MetLife and Emerge Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, Emerge Capital 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 Emerge Capital will offset losses from the drop in Emerge Capital's long position.The idea behind MetLife and Emerge Capital Management 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.| Emerge Capital vs. Blackrock Enhanced Equity | Emerge Capital vs. BlackRock Capital Allocation | Emerge Capital vs. BlackRock Utility Infrastructure | Emerge Capital vs. Blackrock Enhanced Capital |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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