Correlation Between Meta Platforms and Orient Overseas
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Orient Overseas 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 Orient Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Orient Overseas Limited, you can compare the effects of market volatilities on Meta Platforms and Orient Overseas 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 Orient Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Orient Overseas.
Diversification Opportunities for Meta Platforms and Orient Overseas
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meta and Orient is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Orient Overseas Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Overseas 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 Orient Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Overseas has no effect on the direction of Meta Platforms i.e., Meta Platforms and Orient Overseas go up and down completely randomly.
Pair Corralation between Meta Platforms and Orient Overseas
Given the investment horizon of 90 days Meta Platforms is expected to under-perform the Orient Overseas. In addition to that, Meta Platforms is 4.13 times more volatile than Orient Overseas Limited. It trades about -0.1 of its total potential returns per unit of risk. Orient Overseas Limited is currently generating about 0.21 per unit of volatility. If you would invest 1,370 in Orient Overseas Limited on August 30, 2024 and sell it today you would earn a total of 26.00 from holding Orient Overseas Limited or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meta Platforms vs. Orient Overseas Limited
Performance |
| Timeline |
| Meta Platforms |
| Orient Overseas |
Meta Platforms and Orient Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and Orient Overseas
The main advantage of trading using opposite Meta Platforms and Orient Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Orient Overseas 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 Orient Overseas will offset losses from the drop in Orient Overseas' long position.| Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Twilio Inc | Meta Platforms vs. Snap Inc | Meta Platforms vs. Baidu Inc |
| Orient Overseas vs. SITC International Holdings | Orient Overseas vs. COSCO SHIPPING Holdings | Orient Overseas vs. Pacific Basin Shipping | Orient Overseas vs. Mitsui OSK Lines |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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