Correlation Between Computer Modelling and Meta Platforms

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

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

Diversification Opportunities for Computer Modelling and Meta Platforms

-0.37

Correlation Coefficient

Computer Modelling  Meta Platforms

Very good diversification

The 3 months correlation between Computer and Meta is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Computer Modelling Group 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 Computer Modelling 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 Computer Modelling Group 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 Computer Modelling i.e., Computer Modelling and Meta Platforms go up and down completely randomly.

Pair Corralation between Computer Modelling and Meta Platforms

Assuming the 90 days trading horizon Computer Modelling is expected to generate 9.93 times less return on investment than Meta Platforms. In addition to that, Computer Modelling is 1.52 times more volatile than Meta Platforms CDR. It trades about 0.02 of its total potential returns per unit of risk. Meta Platforms CDR is currently generating about 0.31 per unit of volatility. If you would invest  2,663  in Meta Platforms CDR on April 21, 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Computer Modelling Group  vs.  Meta Platforms CDR

Computer Modelling

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Computer Modelling Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Computer Modelling is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 Computer Modelling and Meta Platforms

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

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.