Correlation Between Meta Platforms and Twitter
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Twitter 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 Twitter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Twitter, you can compare the effects of market volatilities on Meta Platforms and Twitter 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 Twitter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Twitter.
Diversification Opportunities for Meta Platforms and Twitter
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meta and Twitter is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Twitter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twitter 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 Twitter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twitter has no effect on the direction of Meta Platforms i.e., Meta Platforms and Twitter go up and down completely randomly.
Pair Corralation between Meta Platforms and Twitter
If you would invest 5,370 in Twitter on December 30, 2023 and sell it today you would earn a total of 0.00 from holding Twitter or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Meta Platforms vs. Twitter
Performance |
Timeline |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Meta Platforms and Twitter Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meta Platforms and Twitter
The main advantage of trading using opposite Meta Platforms and Twitter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Twitter 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 Twitter will offset losses from the drop in Twitter's long position.Meta Platforms vs. Amgen Inc | Meta Platforms vs. Apogee Enterprises | Meta Platforms vs. Simpson Manufacturing | Meta Platforms vs. Western Digital |
Twitter vs. United Guardian | Twitter vs. Kinetik Holdings | Twitter vs. Philip Morris International | Twitter vs. ASML Holding NV |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |