Correlation Between Shutterstock and Meta Platforms

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Shutterstock and Meta Platforms 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 Shutterstock and Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shutterstock and Meta Platforms, you can compare the effects of market volatilities on Shutterstock and Meta Platforms 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 Shutterstock with a short position of Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shutterstock and Meta Platforms.

Diversification Opportunities for Shutterstock and Meta Platforms

-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between Shutterstock and Meta is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shutterstock and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms and Shutterstock 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 Shutterstock are associated (or correlated) with Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of Shutterstock i.e., Shutterstock and Meta Platforms go up and down completely randomly.

Pair Corralation between Shutterstock and Meta Platforms

Given the investment horizon of 90 days Shutterstock is expected to generate 1.89 times more return on investment than Meta Platforms. However, Shutterstock is 1.89 times more volatile than Meta Platforms. It trades about 0.02 of its potential returns per unit of risk. Meta Platforms is currently generating about -0.02 per unit of risk. If you would invest  3,157  in Shutterstock on September 3, 2024 and sell it today you would earn a total of  11.00  from holding Shutterstock or generate 0.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Shutterstock  vs.  Meta Platforms

 Performance 
       Timeline  
Shutterstock 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Shutterstock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Shutterstock is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Meta Platforms 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Meta Platforms are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Meta Platforms may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Shutterstock and Meta Platforms Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shutterstock and Meta Platforms

The main advantage of trading using opposite Shutterstock and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shutterstock position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.
The idea behind Shutterstock and Meta Platforms pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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.

Other Complementary Tools

Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities