Correlation Between Meta Platforms and Atlantic Energy
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Atlantic Energy 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 Atlantic Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Atlantic Energy Solutions, you can compare the effects of market volatilities on Meta Platforms and Atlantic Energy 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 Atlantic Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Atlantic Energy.
Diversification Opportunities for Meta Platforms and Atlantic Energy
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Meta and Atlantic is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Atlantic Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Energy Solutions 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 Atlantic Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Energy Solutions has no effect on the direction of Meta Platforms i.e., Meta Platforms and Atlantic Energy go up and down completely randomly.
Pair Corralation between Meta Platforms and Atlantic Energy
Given the investment horizon of 90 days Meta Platforms is expected to generate 4.87 times less return on investment than Atlantic Energy. But when comparing it to its historical volatility, Meta Platforms is 9.76 times less risky than Atlantic Energy. It trades about 0.08 of its potential returns per unit of risk. Atlantic Energy Solutions is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.85 in Atlantic Energy Solutions on October 25, 2024 and sell it today you would lose (0.09) from holding Atlantic Energy Solutions or give up 10.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Meta Platforms vs. Atlantic Energy Solutions
Performance |
| Timeline |
| Meta Platforms |
| Atlantic Energy Solutions |
Meta Platforms and Atlantic Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and Atlantic Energy
The main advantage of trading using opposite Meta Platforms and Atlantic Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Atlantic Energy 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 Atlantic Energy will offset losses from the drop in Atlantic Energy's long position.| Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Twilio Inc | Meta Platforms vs. Snap Inc | Meta Platforms vs. Baidu Inc |
| Atlantic Energy vs. Simulated Environmen | Atlantic Energy vs. Mundus Group | Atlantic Energy vs. Xtra Energy 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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