Correlation Between Meta Platforms and New Horizon
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and New Horizon 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 New Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and New Horizon Group, you can compare the effects of market volatilities on Meta Platforms and New Horizon 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 New Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and New Horizon.
Diversification Opportunities for Meta Platforms and New Horizon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Meta and New is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and New Horizon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Horizon Group 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 New Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Horizon Group has no effect on the direction of Meta Platforms i.e., Meta Platforms and New Horizon go up and down completely randomly.
Pair Corralation between Meta Platforms and New Horizon
If you would invest (100.00) in New Horizon Group on January 25, 2024 and sell it today you would earn a total of 100.00 from holding New Horizon Group or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Meta Platforms vs. New Horizon Group
Performance |
| Timeline |
| Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| New Horizon Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Meta Platforms and New Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and New Horizon
The main advantage of trading using opposite Meta Platforms and New Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, New Horizon 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 New Horizon will offset losses from the drop in New Horizon'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 |
| New Horizon vs. First International Bank | New Horizon vs. Magic Software Enterprises | New Horizon vs. Bio Meat Foodtech | New Horizon vs. Blender Financial Technologies |
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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