Correlation Between General Electric and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both General Electric and Meta Platforms 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 General Electric and Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Electric and Meta Platforms, you can compare the effects of market volatilities on General Electric and Meta Platforms 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 General Electric with a short position of Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Electric and Meta Platforms.
Diversification Opportunities for General Electric and Meta Platforms
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between General and Meta is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding General Electric and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms and General Electric 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 General Electric are associated (or correlated) with Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of General Electric i.e., General Electric and Meta Platforms go up and down completely randomly.
Pair Corralation between General Electric and Meta Platforms
If you would invest 15,399 in General Electric on December 29, 2023 and sell it today you would earn a total of 2,613 from holding General Electric or generate 16.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 4.55% |
Values | Daily Returns |
General Electric vs. Meta Platforms
Performance |
Timeline |
General Electric |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
General Electric and Meta Platforms Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with General Electric and Meta Platforms
The main advantage of trading using opposite General Electric and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Electric position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.General Electric vs. Barnes Group | General Electric vs. Babcock Wilcox Enterprises | General Electric vs. Crane Company | General Electric vs. Hillenbrand |
Meta Platforms vs. Jacobs Solutions | Meta Platforms vs. ATRenew Inc DRC | Meta Platforms vs. Radcom | Meta Platforms vs. Arrow Electronics |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |