Correlation Between Meta Platforms and NAVER Corp

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

By analyzing existing cross correlation between Meta Platforms and NAVER Corp, you can compare the effects of market volatilities on Meta Platforms and NAVER Corp 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 NAVER Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and NAVER Corp.

Diversification Opportunities for Meta Platforms and NAVER Corp

0.0

Correlation Coefficient

Meta Platforms  NAVER Corp

Pay attention - limited upside

The 3 months correlation between Meta and NAVER is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and NAVER Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAVER Corp 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 NAVER Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAVER Corp has no effect on the direction of Meta Platforms i.e., Meta Platforms and NAVER Corp go up and down completely randomly.

Pair Corralation between Meta Platforms and NAVER Corp

If you would invest  59,881  in Meta Platforms on May 5, 2025 and sell it today you would earn a total of  15,120  from holding Meta Platforms or generate 25.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Meta Platforms  vs.  NAVER Corp

Meta Platforms

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Meta Platforms are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Meta Platforms sustained solid returns over the last few months and may actually be approaching a breakup point.

NAVER Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days NAVER Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, NAVER Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Meta Platforms and NAVER Corp

The main advantage of trading using opposite Meta Platforms and NAVER Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, NAVER Corp 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 NAVER Corp will offset losses from the drop in NAVER Corp's long position.

The idea behind Meta Platforms and NAVER Corp 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.