Correlation Between Capitol Federal and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both Capitol Federal and Metropolitan Bank 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 Capitol Federal and Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capitol Federal Financial and Metropolitan Bank Holding, you can compare the effects of market volatilities on Capitol Federal and Metropolitan Bank 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 Capitol Federal with a short position of Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitol Federal and Metropolitan Bank.
Diversification Opportunities for Capitol Federal and Metropolitan Bank
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capitol and Metropolitan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Federal Financial and Metropolitan Bank Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Bank Holding and Capitol Federal 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 Capitol Federal Financial are associated (or correlated) with Metropolitan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Bank Holding has no effect on the direction of Capitol Federal i.e., Capitol Federal and Metropolitan Bank go up and down completely randomly.
Pair Corralation between Capitol Federal and Metropolitan Bank
Given the investment horizon of 90 days Capitol Federal Financial is expected to generate 0.84 times more return on investment than Metropolitan Bank. However, Capitol Federal Financial is 1.19 times less risky than Metropolitan Bank. It trades about 0.05 of its potential returns per unit of risk. Metropolitan Bank Holding is currently generating about -0.02 per unit of risk. If you would invest 602.00 in Capitol Federal Financial on August 17, 2025 and sell it today you would earn a total of 27.00 from holding Capitol Federal Financial or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitol Federal Financial vs. Metropolitan Bank Holding
Performance |
| Timeline |
| Capitol Federal Financial |
| Metropolitan Bank Holding |
Capitol Federal and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitol Federal and Metropolitan Bank
The main advantage of trading using opposite Capitol Federal and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitol Federal position performs unexpectedly, Metropolitan Bank 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 Metropolitan Bank will offset losses from the drop in Metropolitan Bank's long position.| Capitol Federal vs. Hanmi Financial | Capitol Federal vs. MidWestOne Financial Group | Capitol Federal vs. Central Pacific Financial | Capitol Federal vs. Heritage Financial |
| Metropolitan Bank vs. HomeTrust Bancshares, | Metropolitan Bank vs. NB Bancorp, Common | Metropolitan Bank vs. Amerant Bancorp | Metropolitan Bank vs. Capital City Bank |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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