Correlation Between Meta Platforms and Apple
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Apple Inc, you can compare the effects of market volatilities on Meta Platforms and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Apple.
Diversification Opportunities for Meta Platforms and Apple
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meta and Apple is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Meta Platforms i.e., Meta Platforms and Apple go up and down completely randomly.
Pair Corralation between Meta Platforms and Apple
Given the investment horizon of 90 days Meta Platforms is expected to under-perform the Apple. In addition to that, Meta Platforms is 2.14 times more volatile than Apple Inc. It trades about -0.16 of its total potential returns per unit of risk. Apple Inc is currently generating about -0.01 per unit of volatility. If you would invest 17,003 in Apple Inc on January 29, 2024 and sell it today you would lose (73.00) from holding Apple Inc or give up 0.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Meta Platforms vs. Apple Inc
Performance |
Timeline |
Meta Platforms |
Apple Inc |
Meta Platforms and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meta Platforms and Apple
The main advantage of trading using opposite Meta Platforms and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.Meta Platforms vs. YY Inc Class | Meta Platforms vs. DouYu International Holdings | Meta Platforms vs. Tencent Music Entertainment | Meta Platforms vs. Autohome |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |