Correlation Between MetLife and Arch Capital
Can any of the company-specific risk be diversified away by investing in both MetLife and Arch 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 Arch Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and Arch Capital Group, you can compare the effects of market volatilities on MetLife and Arch 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 Arch Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and Arch Capital.
Diversification Opportunities for MetLife and Arch Capital
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MetLife and Arch is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Arch Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arch Capital Group 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 Arch Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arch Capital Group has no effect on the direction of MetLife i.e., MetLife and Arch Capital go up and down completely randomly.
Pair Corralation between MetLife and Arch Capital
Considering the 90-day investment horizon MetLife is expected to generate 11.05 times less return on investment than Arch Capital. In addition to that, MetLife is 1.07 times more volatile than Arch Capital Group. It trades about 0.0 of its total potential returns per unit of risk. Arch Capital Group is currently generating about 0.02 per unit of volatility. If you would invest 9,090 in Arch Capital Group on September 7, 2025 and sell it today you would earn a total of 82.00 from holding Arch Capital Group or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetLife vs. Arch Capital Group
Performance |
| Timeline |
| MetLife |
| Arch Capital Group |
MetLife and Arch Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and Arch Capital
The main advantage of trading using opposite MetLife and Arch Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, Arch 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 Arch Capital will offset losses from the drop in Arch Capital's long position.| MetLife vs. FG Annuities Life | MetLife vs. Globe Life | MetLife vs. New China Life | MetLife vs. Just Group plc |
| Arch Capital vs. Safety Insurance Group | Arch Capital vs. Hamilton Insurance Group, | Arch Capital vs. Xiabuxiabu Catering Management | Arch Capital vs. Perfect Medical Health |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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