Correlation Between Meta Platforms and INTEL CDR
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and INTEL CDR 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 INTEL CDR 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 INTEL CDR, you can compare the effects of market volatilities on Meta Platforms and INTEL CDR 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 INTEL CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and INTEL CDR.
Diversification Opportunities for Meta Platforms and INTEL CDR
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meta and INTEL is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms CDR and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR 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 INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of Meta Platforms i.e., Meta Platforms and INTEL CDR go up and down completely randomly.
Pair Corralation between Meta Platforms and INTEL CDR
Assuming the 90 days trading horizon Meta Platforms CDR is expected to generate 0.72 times more return on investment than INTEL CDR. However, Meta Platforms CDR is 1.39 times less risky than INTEL CDR. It trades about 0.08 of its potential returns per unit of risk. INTEL CDR is currently generating about -0.07 per unit of risk. If you would invest 2,248 in Meta Platforms CDR on October 24, 2024 and sell it today you would earn a total of 1,167 from holding Meta Platforms CDR or generate 51.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meta Platforms CDR vs. INTEL CDR
Performance |
| Timeline |
| Meta Platforms CDR |
| INTEL CDR |
Meta Platforms and INTEL CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and INTEL CDR
The main advantage of trading using opposite Meta Platforms and INTEL CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, INTEL CDR 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 INTEL CDR will offset losses from the drop in INTEL CDR's long position.| Meta Platforms vs. Verizon Communications CDR | Meta Platforms vs. Maple Leaf Foods | Meta Platforms vs. Rogers Communications | Meta Platforms vs. NextSource Materials |
| INTEL CDR vs. Canadian Utilities Limited | INTEL CDR vs. Quipt Home Medical | INTEL CDR vs. Canso Select Opportunities | INTEL CDR vs. XXIX Metal Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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