Correlation Between Meta Platforms and Intel

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Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Intel, you can compare the effects of market volatilities on Meta Platforms and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Intel.

Diversification Opportunities for Meta Platforms and Intel

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Meta and Intel is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Meta Platforms i.e., Meta Platforms and Intel go up and down completely randomly.

Pair Corralation between Meta Platforms and Intel

If you would invest  4,273  in Intel on December 29, 2023 and sell it today you would earn a total of  104.00  from holding Intel or generate 2.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy4.55%
ValuesDaily Returns

Meta Platforms  vs.  Intel

 Performance 
       Timeline  
Meta Platforms 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Meta Platforms has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Meta Platforms is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.
Intel 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Meta Platforms and Intel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Meta Platforms and Intel

The main advantage of trading using opposite Meta Platforms and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.
The idea behind Meta Platforms and Intel 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.
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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