Correlation Between Meta Platforms and Air Canada
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Air Canada 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 Meta Platforms and Air Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms CDR and Air Canada, you can compare the effects of market volatilities on Meta Platforms and Air Canada 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 Air Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Air Canada.
Diversification Opportunities for Meta Platforms and Air Canada
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meta and Air is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms CDR and Air Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Canada 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 CDR are associated (or correlated) with Air Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Canada has no effect on the direction of Meta Platforms i.e., Meta Platforms and Air Canada go up and down completely randomly.
Pair Corralation between Meta Platforms and Air Canada
Assuming the 90 days trading horizon Meta Platforms CDR is expected to generate 1.29 times more return on investment than Air Canada. However, Meta Platforms is 1.29 times more volatile than Air Canada. It trades about 0.27 of its potential returns per unit of risk. Air Canada is currently generating about -0.48 per unit of risk. If you would invest 3,491 in Meta Platforms CDR on November 5, 2024 and sell it today you would earn a total of 327.00 from holding Meta Platforms CDR or generate 9.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meta Platforms CDR vs. Air Canada
Performance |
| Timeline |
| Meta Platforms CDR |
| Air Canada |
Meta Platforms and Air Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and Air Canada
The main advantage of trading using opposite Meta Platforms and Air Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Air Canada 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 Air Canada will offset losses from the drop in Air Canada's long position.| Meta Platforms vs. Hemisphere Energy | Meta Platforms vs. Black Mammoth Metals | Meta Platforms vs. Brookfield Asset Management | Meta Platforms vs. Imperial Metals |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |