Correlation Between Meta Platforms and XL Fleet
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and XL Fleet 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 XL Fleet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and XL Fleet Corp, you can compare the effects of market volatilities on Meta Platforms and XL Fleet 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 XL Fleet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and XL Fleet.
Diversification Opportunities for Meta Platforms and XL Fleet
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meta and XL Fleet is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and XL Fleet Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XL Fleet Corp 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 XL Fleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XL Fleet Corp has no effect on the direction of Meta Platforms i.e., Meta Platforms and XL Fleet go up and down completely randomly.
Pair Corralation between Meta Platforms and XL Fleet
If you would invest 51,127 in Meta Platforms on August 31, 2024 and sell it today you would earn a total of 5,793 from holding Meta Platforms or generate 11.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
Meta Platforms vs. XL Fleet Corp
Performance |
| Timeline |
| Meta Platforms |
| XL Fleet Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Meta Platforms and XL Fleet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and XL Fleet
The main advantage of trading using opposite Meta Platforms and XL Fleet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, XL Fleet 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 XL Fleet will offset losses from the drop in XL Fleet'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 |
| XL Fleet vs. Sealed Air | XL Fleet vs. Codexis | XL Fleet vs. Chemours Co | XL Fleet vs. Hannon Armstrong Sustainable |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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