Correlation Between Meta Platforms and Phoenix New
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Phoenix New 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 Phoenix New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Phoenix New Media, you can compare the effects of market volatilities on Meta Platforms and Phoenix New 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 Phoenix New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Phoenix New.
Diversification Opportunities for Meta Platforms and Phoenix New
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meta and Phoenix is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Phoenix New Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix New Media 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 Phoenix New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix New Media has no effect on the direction of Meta Platforms i.e., Meta Platforms and Phoenix New go up and down completely randomly.
Pair Corralation between Meta Platforms and Phoenix New
Allowing for the 90-day total investment horizon Meta Platforms is expected to under-perform the Phoenix New. But the stock apears to be less risky and, when comparing its historical volatility, Meta Platforms is 1.15 times less risky than Phoenix New. The stock trades about -0.08 of its potential returns per unit of risk. The Phoenix New Media is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 337.00 in Phoenix New Media on December 30, 2023 and sell it today you would lose (143.00) from holding Phoenix New Media or give up 42.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 10.93% |
Values | Daily Returns |
Meta Platforms vs. Phoenix New Media
Performance |
Timeline |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Phoenix New Media |
Meta Platforms and Phoenix New Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meta Platforms and Phoenix New
The main advantage of trading using opposite Meta Platforms and Phoenix New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Phoenix New 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 Phoenix New will offset losses from the drop in Phoenix New'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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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