Correlation Between Metro Retail and Vista Land

Can any of the company-specific risk be diversified away by investing in both Metro Retail and Vista Land 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 Metro Retail and Vista Land into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Metro Retail Stores and Vista Land and, you can compare the effects of market volatilities on Metro Retail and Vista Land 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 Metro Retail with a short position of Vista Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Retail and Vista Land.

Diversification Opportunities for Metro Retail and Vista Land

-0.2

Correlation Coefficient

Metro Retail  Vista Land

Good diversification

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

Pair Corralation between Metro Retail and Vista Land

Assuming the 90 days trading horizon Metro Retail is expected to generate 6.28 times less return on investment than Vista Land. In addition to that, Metro Retail is 1.1 times more volatile than Vista Land and. It trades about 0.0 of its total potential returns per unit of risk. Vista Land and is currently generating about 0.02 per unit of volatility. If you would invest  133.00  in Vista Land and on September 5, 2024 and sell it today you would earn a total of  18.00  from holding Vista Land and or generate 13.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.68%
Values	Daily Returns

Metro Retail Stores  vs.  Vista Land and

Metro Retail Stores

Risk-Adjusted Performance

0 of 100

Very Weak

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

Vista Land

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vista Land and are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Vista Land may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Metro Retail and Vista Land

The main advantage of trading using opposite Metro Retail and Vista Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Retail position performs unexpectedly, Vista Land 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 Vista Land will offset losses from the drop in Vista Land's long position.

The idea behind Metro Retail Stores and Vista Land and 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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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 Global Correlations module to find global opportunities by holding instruments from different markets.