Correlation Between Hugo Boss and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both Hugo Boss 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 Hugo Boss and Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hugo Boss AG and Meta Platforms, you can compare the effects of market volatilities on Hugo Boss 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 Hugo Boss with a short position of Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hugo Boss and Meta Platforms.
Diversification Opportunities for Hugo Boss and Meta Platforms
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hugo and Meta is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hugo Boss AG and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms and Hugo Boss 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 Hugo Boss AG 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 Hugo Boss i.e., Hugo Boss and Meta Platforms go up and down completely randomly.
Pair Corralation between Hugo Boss and Meta Platforms
Assuming the 90 days trading horizon Hugo Boss is expected to generate 25.51 times less return on investment than Meta Platforms. But when comparing it to its historical volatility, Hugo Boss AG is 1.67 times less risky than Meta Platforms. It trades about 0.0 of its potential returns per unit of risk. Meta Platforms is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 19,645 in Meta Platforms on January 25, 2024 and sell it today you would earn a total of 26,760 from holding Meta Platforms or generate 136.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hugo Boss AG vs. Meta Platforms
Performance |
| Timeline |
| Hugo Boss AG |
| Meta Platforms |
Hugo Boss and Meta Platforms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hugo Boss and Meta Platforms
The main advantage of trading using opposite Hugo Boss and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hugo Boss 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.| Hugo Boss vs. AXWAY SOFTWARE EO | Hugo Boss vs. Adtalem Global Education | Hugo Boss vs. Hope Education Group | Hugo Boss vs. FORMPIPE SOFTWARE AB |
| Meta Platforms vs. Amazon Inc | Meta Platforms vs. Apple Inc | Meta Platforms vs. Meta Platforms | Meta Platforms vs. Microsoft |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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