Correlation Between Meta Platforms and First Trust
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and First Trust 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 First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and First Trust SMID, you can compare the effects of market volatilities on Meta Platforms and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and First Trust.
Diversification Opportunities for Meta Platforms and First Trust
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Meta and First is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and First Trust SMID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust SMID 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust SMID has no effect on the direction of Meta Platforms i.e., Meta Platforms and First Trust go up and down completely randomly.
Pair Corralation between Meta Platforms and First Trust
Given the investment horizon of 90 days Meta Platforms is expected to generate 2.42 times more return on investment than First Trust. However, Meta Platforms is 2.42 times more volatile than First Trust SMID. It trades about 0.11 of its potential returns per unit of risk. First Trust SMID is currently generating about 0.04 per unit of risk. If you would invest 62,681 in Meta Platforms on November 4, 2025 and sell it today you would earn a total of 8,969 from holding Meta Platforms or generate 14.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Meta Platforms vs. First Trust SMID
Performance |
| Timeline |
| Meta Platforms |
| First Trust SMID |
Meta Platforms and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and First Trust
The main advantage of trading using opposite Meta Platforms and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Meta Platforms vs. Taiwan Semiconductor Manufacturing | Meta Platforms vs. Broadcom | Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Oracle |
| First Trust vs. First Trust Nasdaq | First Trust vs. WBI BullBear Value | First Trust vs. ProShares Ultra SmallCap600 | First Trust vs. Strategy Shares NewfoundReSolve |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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