Correlation Between Metlife and Ansys

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Can any of the company-specific risk be diversified away by investing in both Metlife and Ansys 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 Ansys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metlife and Ansys Inc, you can compare the effects of market volatilities on Metlife and Ansys 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 Ansys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metlife and Ansys.

Diversification Opportunities for Metlife and Ansys

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between Metlife and Ansys is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Metlife and Ansys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ansys 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 Ansys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ansys Inc has no effect on the direction of Metlife i.e., Metlife and Ansys go up and down completely randomly.

Pair Corralation between Metlife and Ansys

Considering the 90-day investment horizon Metlife is expected to generate 0.71 times more return on investment than Ansys. However, Metlife is 1.41 times less risky than Ansys. It trades about 0.07 of its potential returns per unit of risk. Ansys Inc is currently generating about -0.01 per unit of risk. If you would invest  4,473  in Metlife on September 1, 2022 and sell it today you would earn a total of  3,071  from holding Metlife or generate 68.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Metlife  vs.  Ansys Inc

 Performance (%) 
       Timeline  
Metlife 
Metlife Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Metlife are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Metlife unveiled solid returns over the last few months and may actually be approaching a breakup point.

Metlife Price Channel

Ansys Inc 
Ansys Performance
0 of 100
Over the last 90 days Ansys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Ansys is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Ansys Price Channel

Metlife and Ansys Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Metlife and Ansys

The main advantage of trading using opposite Metlife and Ansys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metlife position performs unexpectedly, Ansys 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 Ansys will offset losses from the drop in Ansys' long position.
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The idea behind Metlife and Ansys 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.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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