Correlation Between Metropolitan Bank and Central Pacific
Can any of the company-specific risk be diversified away by investing in both Metropolitan Bank and Central Pacific 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 Metropolitan Bank and Central Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan Bank Holding and Central Pacific Financial, you can compare the effects of market volatilities on Metropolitan Bank and Central Pacific 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 Metropolitan Bank with a short position of Central Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan Bank and Central Pacific.
Diversification Opportunities for Metropolitan Bank and Central Pacific
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metropolitan and Central is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan Bank Holding and Central Pacific Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Pacific Financial and Metropolitan Bank 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 Metropolitan Bank Holding are associated (or correlated) with Central Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Pacific Financial has no effect on the direction of Metropolitan Bank i.e., Metropolitan Bank and Central Pacific go up and down completely randomly.
Pair Corralation between Metropolitan Bank and Central Pacific
Considering the 90-day investment horizon Metropolitan Bank Holding is expected to under-perform the Central Pacific. In addition to that, Metropolitan Bank is 1.17 times more volatile than Central Pacific Financial. It trades about -0.03 of its total potential returns per unit of risk. Central Pacific Financial is currently generating about -0.02 per unit of volatility. If you would invest 3,065 in Central Pacific Financial on September 2, 2025 and sell it today you would lose (91.00) from holding Central Pacific Financial or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan Bank Holding vs. Central Pacific Financial
Performance |
| Timeline |
| Metropolitan Bank Holding |
| Central Pacific Financial |
Metropolitan Bank and Central Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan Bank and Central Pacific
The main advantage of trading using opposite Metropolitan Bank and Central Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan Bank position performs unexpectedly, Central Pacific 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 Central Pacific will offset losses from the drop in Central Pacific's long position.| Metropolitan Bank vs. Aperture Health | Metropolitan Bank vs. Globe Trade Centre | Metropolitan Bank vs. Yooma Wellness | Metropolitan Bank vs. Urban Outfitters |
| Central Pacific vs. Mitsubishi Chemical Holdings | Central Pacific vs. Cyberfort Software | Central Pacific vs. Mitsui Chemicals ADR | Central Pacific vs. Cognyte Software |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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