Correlation Between Meta Platforms and Five Star
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Five Star 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 Five Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Five Star Bancorp, you can compare the effects of market volatilities on Meta Platforms and Five Star 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 Five Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Five Star.
Diversification Opportunities for Meta Platforms and Five Star
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meta and Five is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Five Star Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Star Bancorp 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 Five Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Star Bancorp has no effect on the direction of Meta Platforms i.e., Meta Platforms and Five Star go up and down completely randomly.
Pair Corralation between Meta Platforms and Five Star
If you would invest 16,949 in Meta Platforms on December 30, 2023 and sell it today you would earn a total of 0.00 from holding Meta Platforms or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Meta Platforms vs. Five Star Bancorp
Performance |
Timeline |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Five Star Bancorp |
Meta Platforms and Five Star Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meta Platforms and Five Star
The main advantage of trading using opposite Meta Platforms and Five Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Five Star 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 Five Star will offset losses from the drop in Five Star's long position.Meta Platforms vs. Amgen Inc | Meta Platforms vs. Apogee Enterprises | Meta Platforms vs. Simpson Manufacturing | Meta Platforms vs. Western Digital |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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