Correlation Between Meta Platforms and Flushing Financial
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Flushing Financial 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 Flushing Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Flushing Financial, you can compare the effects of market volatilities on Meta Platforms and Flushing Financial 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 Flushing Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Flushing Financial.
Diversification Opportunities for Meta Platforms and Flushing Financial
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Meta and Flushing is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Flushing Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flushing Financial 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 Flushing Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flushing Financial has no effect on the direction of Meta Platforms i.e., Meta Platforms and Flushing Financial go up and down completely randomly.
Pair Corralation between Meta Platforms and Flushing Financial
Given the investment horizon of 90 days Meta Platforms is expected to under-perform the Flushing Financial. But the stock apears to be less risky and, when comparing its historical volatility, Meta Platforms is 1.07 times less risky than Flushing Financial. The stock trades about -0.01 of its potential returns per unit of risk. The Flushing Financial is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,270 in Flushing Financial on February 23, 2024 and sell it today you would earn a total of 81.00 from holding Flushing Financial or generate 6.38% 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. Flushing Financial
Performance |
Timeline |
Meta Platforms |
Flushing Financial |
Meta Platforms and Flushing Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meta Platforms and Flushing Financial
The main advantage of trading using opposite Meta Platforms and Flushing Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Flushing Financial 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 Flushing Financial will offset losses from the drop in Flushing Financial's long position.Meta Platforms vs. Twilio Inc | Meta Platforms vs. Match Group | Meta Platforms vs. Spotify Technology SA | Meta Platforms vs. DoorDash Class A |
Flushing Financial vs. HUMANA INC | Flushing Financial vs. Small Cap Core | Flushing Financial vs. High Yield Municipal Fund | Flushing Financial vs. Knife River |
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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