Correlation Between Meta Platforms and IAC
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and IAC 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 IAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and IAC Inc, you can compare the effects of market volatilities on Meta Platforms and IAC 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 IAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and IAC.
Diversification Opportunities for Meta Platforms and IAC
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meta and IAC is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and IAC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAC 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 IAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAC Inc has no effect on the direction of Meta Platforms i.e., Meta Platforms and IAC go up and down completely randomly.
Pair Corralation between Meta Platforms and IAC
Allowing for the 90-day total investment horizon Meta Platforms is expected to under-perform the IAC. In addition to that, Meta Platforms is 1.34 times more volatile than IAC Inc. It trades about -0.13 of its total potential returns per unit of risk. IAC Inc is currently generating about -0.03 per unit of volatility. If you would invest 8,405 in IAC Inc on January 21, 2024 and sell it today you would lose (3,605) from holding IAC Inc or give up 42.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 8.06% |
| Values | Daily Returns |
Meta Platforms vs. IAC Inc
Performance |
| Timeline |
| Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| IAC Inc |
Meta Platforms and IAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and IAC
The main advantage of trading using opposite Meta Platforms and IAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, IAC 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 IAC will offset losses from the drop in IAC's long position.| Meta Platforms vs. Meta Platforms | Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Twilio Inc | Meta Platforms vs. Snap Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |