Correlation Between Meta Platforms and Inpex
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Inpex 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 Inpex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Inpex, you can compare the effects of market volatilities on Meta Platforms and Inpex 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 Inpex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Inpex.
Diversification Opportunities for Meta Platforms and Inpex
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meta and Inpex is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Inpex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpex 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 Inpex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpex has no effect on the direction of Meta Platforms i.e., Meta Platforms and Inpex go up and down completely randomly.
Pair Corralation between Meta Platforms and Inpex
Given the investment horizon of 90 days Meta Platforms is expected to generate 0.33 times more return on investment than Inpex. However, Meta Platforms is 3.05 times less risky than Inpex. It trades about 0.07 of its potential returns per unit of risk. Inpex is currently generating about -0.02 per unit of risk. If you would invest 65,988 in Meta Platforms on November 28, 2024 and sell it today you would earn a total of 1,382 from holding Meta Platforms or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Meta Platforms vs. Inpex
Performance |
| Timeline |
| Meta Platforms |
| Inpex |
Meta Platforms and Inpex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and Inpex
The main advantage of trading using opposite Meta Platforms and Inpex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Inpex 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 Inpex will offset losses from the drop in Inpex'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 |
| Inpex vs. Gulf Keystone Petroleum | Inpex vs. CGX Energy | Inpex vs. Granite Ridge Resources | Inpex vs. GeoPark |
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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