Correlation Between Meta Platforms and IShares Asia
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and IShares Asia 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 IShares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and iShares Asia Trust, you can compare the effects of market volatilities on Meta Platforms and IShares Asia 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 IShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and IShares Asia.
Diversification Opportunities for Meta Platforms and IShares Asia
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meta and IShares is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and iShares Asia Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Asia Trust 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 IShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Asia Trust has no effect on the direction of Meta Platforms i.e., Meta Platforms and IShares Asia go up and down completely randomly.
Pair Corralation between Meta Platforms and IShares Asia
If you would invest 151.00 in iShares Asia Trust on January 26, 2024 and sell it today you would earn a total of 1.00 from holding iShares Asia Trust or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Meta Platforms vs. iShares Asia Trust
Performance |
| Timeline |
| Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iShares Asia Trust |
Meta Platforms and IShares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and IShares Asia
The main advantage of trading using opposite Meta Platforms and IShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, IShares Asia 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 IShares Asia will offset losses from the drop in IShares Asia'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 |
| IShares Asia vs. Vanguard Total Stock | IShares Asia vs. SPDR SP 500 | IShares Asia vs. iShares Core SP | IShares Asia vs. Vanguard Total Bond |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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