Correlation Between Meta Platforms and Lesico
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Lesico 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 Lesico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Lesico, you can compare the effects of market volatilities on Meta Platforms and Lesico 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 Lesico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Lesico.
Diversification Opportunities for Meta Platforms and Lesico
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meta and Lesico is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Lesico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesico 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 Lesico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lesico has no effect on the direction of Meta Platforms i.e., Meta Platforms and Lesico go up and down completely randomly.
Pair Corralation between Meta Platforms and Lesico
If you would invest 29,120 in Lesico on January 20, 2024 and sell it today you would earn a total of 4,090 from holding Lesico or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.92% |
| Values | Daily Returns |
Meta Platforms vs. Lesico
Performance |
| Timeline |
| Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lesico |
Meta Platforms and Lesico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and Lesico
The main advantage of trading using opposite Meta Platforms and Lesico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Lesico 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 Lesico will offset losses from the drop in Lesico'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 |
| Lesico vs. EN Shoham Business | Lesico vs. Accel Solutions Group | Lesico vs. Mivtach Shamir | Lesico vs. Rani Zim Shopping |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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