Correlation Between Meta Platforms and Boeing
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Boeing 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 Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and The Boeing, you can compare the effects of market volatilities on Meta Platforms and Boeing 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 Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Boeing.
Diversification Opportunities for Meta Platforms and Boeing
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Meta and Boeing is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing 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 Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of Meta Platforms i.e., Meta Platforms and Boeing go up and down completely randomly.
Pair Corralation between Meta Platforms and Boeing
If you would invest 16,949 in Meta Platforms on January 26, 2024 and sell it today you would earn a total of 0.00 from holding Meta Platforms or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Meta Platforms vs. The Boeing
Performance |
| Timeline |
| Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Boeing |
Meta Platforms and Boeing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and Boeing
The main advantage of trading using opposite Meta Platforms and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.| Meta Platforms vs. Meta Platforms | Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Twilio Inc | Meta Platforms vs. Snap Inc |
| Boeing vs. HEICO | Boeing vs. L3Harris Technologies | Boeing vs. Huntington Ingalls Industries | Boeing vs. Lockheed Martin |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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