This module allows you to analyze existing cross correlation between Facebook and Equinix. You can compare the effects of market volatilities on Facebook and Equinix 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 Facebook with a short position of Equinix. See also your portfolio center. Please also check ongoing floating volatility patterns of Facebook and Equinix.
Allowing for the 30-days total investment horizon, Facebook is expected to generate 1.21 times more return on investment than Equinix. However, Facebook is 1.21 times more volatile than Equinix. It trades about 0.26 of its potential returns per unit of risk. Equinix is currently generating about 0.17 per unit of risk. If you would invest 19,635 in Facebook on June 23, 2018 and sell it today you would earn a total of 1,359 from holding Facebook or generate 6.92% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Facebook Inc and Equinix Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Equinix and Facebook 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 Facebook are associated (or correlated) with Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of Facebook i.e. Facebook and Equinix go up and down completely randomly.
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