Correlation Between Facebook and TATA STEEL

By analyzing existing cross correlation between Facebook and TATA STEEL LTD, you can compare the effects of market volatilities on Facebook and TATA STEEL 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 TATA STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Facebook and TATA STEEL.

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Can any of the company-specific risk be diversified away by investing in both Facebook and TATA STEEL 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 Facebook and TATA STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for Facebook and TATA STEEL

  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Facebook and TATASTEEL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Facebook Inc and TATA STEEL LTD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on TATA STEEL LTD 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 TATA STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TATA STEEL LTD has no effect on the direction of Facebook i.e. Facebook and TATA STEEL go up and down completely randomly.

Pair Corralation between Facebook and TATA STEEL

If you would invest  17,697  in Facebook on June 14, 2020 and sell it today you would earn a total of  6,276  from holding Facebook or generate 35.46% return on investment over 30 days.
Time Period3 Months [change]
ValuesDaily Returns

Facebook Inc  vs.  TATA STEEL LTD

 Performance (%) 

Facebook Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Facebook are ranked lower than 14 (%) of all global equities and portfolios over the last 30 days. Despite somewhat unsteady fundamental drivers, Facebook sustained solid returns over the last few months and may actually be approaching a breakup point.

TATA STEEL Risk-Adjusted Performance

Over the last 30 days TATA STEEL LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, TATA STEEL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Facebook and TATA STEEL Volatility Contrast

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