Correlation Between Apple and Meta Platforms

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

By analyzing existing cross correlation between Apple Inc CDR and Meta Platforms CDR, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Meta Platforms.

Diversification Opportunities for Apple and Meta Platforms

0.17

Correlation Coefficient

Apple  Meta Platforms

Average diversification

The 3 months correlation between Apple and Meta is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Meta Platforms CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms CDR and Apple 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 Apple Inc CDR 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 CDR has no effect on the direction of Apple i.e., Apple and Meta Platforms go up and down completely randomly.

Pair Corralation between Apple and Meta Platforms

Assuming the 90 days trading horizon Apple is expected to generate 4.18 times less return on investment than Meta Platforms. But when comparing it to its historical volatility, Apple Inc CDR is 1.23 times less risky than Meta Platforms. It trades about 0.09 of its potential returns per unit of risk. Meta Platforms CDR is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  2,663  in Meta Platforms CDR on April 20, 2025 and sell it today you would earn a total of  1,192  from holding Meta Platforms CDR or generate 44.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Apple Inc CDR  vs.  Meta Platforms CDR

Apple Inc CDR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Meta Platforms CDR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Meta Platforms CDR are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Meta Platforms exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and Meta Platforms

The main advantage of trading using opposite Apple and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.

The idea behind Apple Inc CDR and Meta Platforms CDR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.