Correlation Between Meta Platforms and YY
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and YY 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 YY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and YY Inc Class, you can compare the effects of market volatilities on Meta Platforms and YY 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 YY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and YY.
Diversification Opportunities for Meta Platforms and YY
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Meta and YY is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and YY Inc Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YY Inc Class 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 YY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YY Inc Class has no effect on the direction of Meta Platforms i.e., Meta Platforms and YY go up and down completely randomly.
Pair Corralation between Meta Platforms and YY
Given the investment horizon of 90 days Meta Platforms is expected to generate 0.96 times more return on investment than YY. However, Meta Platforms is 1.04 times less risky than YY. It trades about 0.14 of its potential returns per unit of risk. YY Inc Class is currently generating about 0.03 per unit of risk. If you would invest 11,498 in Meta Platforms on August 29, 2024 and sell it today you would earn a total of 45,422 from holding Meta Platforms or generate 395.04% 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. YY Inc Class
Performance |
| Timeline |
| Meta Platforms |
| YY Inc Class |
Meta Platforms and YY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and YY
The main advantage of trading using opposite Meta Platforms and YY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, YY 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 YY will offset losses from the drop in YY'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 |
| YY vs. Weibo Corp | YY vs. DouYu International Holdings | YY vs. Tencent Music Entertainment | YY vs. Autohome |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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