Correlation Between Meta Platforms and CarGurus
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By analyzing existing cross correlation between Meta Platforms and CarGurus, you can compare the effects of market volatilities on Meta Platforms and CarGurus 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 Meta Platforms with a short position of CarGurus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and CarGurus.
Diversification Opportunities for Meta Platforms and CarGurus
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meta and CarGurus is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and CarGurus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarGurus and Meta Platforms 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 Meta Platforms are associated (or correlated) with CarGurus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarGurus has no effect on the direction of Meta Platforms i.e., Meta Platforms and CarGurus go up and down completely randomly.
Pair Corralation between Meta Platforms and CarGurus
Assuming the 90 days trading horizon Meta Platforms is expected to under-perform the CarGurus. But the stock apears to be less risky and, when comparing its historical volatility, Meta Platforms is 1.91 times less risky than CarGurus. The stock trades about -0.03 of its potential returns per unit of risk. The CarGurus is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,900 in CarGurus on August 31, 2024 and sell it today you would earn a total of 500.00 from holding CarGurus or generate 17.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meta Platforms vs. CarGurus
Performance |
| Timeline |
| Meta Platforms |
| CarGurus |
Meta Platforms and CarGurus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and CarGurus
The main advantage of trading using opposite Meta Platforms and CarGurus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, CarGurus 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 CarGurus will offset losses from the drop in CarGurus' long position.| Meta Platforms vs. KENEDIX OFFICE INV | Meta Platforms vs. POWER METALS | Meta Platforms vs. Lion Biotechnologies | Meta Platforms vs. LION ONE METALS |
| CarGurus vs. EIDESVIK OFFSHORE NK | CarGurus vs. SBM OFFSHORE | CarGurus vs. Japan Medical Dynamic | CarGurus vs. SCANDMEDICAL SOLDK 040 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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