Correlation Between American Funds and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both American Funds and Meta Platforms 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 American Funds and Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2030 and Meta Platforms, you can compare the effects of market volatilities on American Funds and Meta Platforms 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 American Funds with a short position of Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Meta Platforms.
Diversification Opportunities for American Funds and Meta Platforms
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Meta is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding AMERICAN FUNDS 2030 and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms and American Funds 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 American Funds 2030 are associated (or correlated) with Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of American Funds i.e., American Funds and Meta Platforms go up and down completely randomly.
Pair Corralation between American Funds and Meta Platforms
If you would invest 1,658 in American Funds 2030 on December 29, 2023 and sell it today you would earn a total of 42.00 from holding American Funds 2030 or generate 2.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 4.35% |
Values | Daily Returns |
AMERICAN FUNDS 2030 vs. Meta Platforms
Performance |
Timeline |
American Funds 2030 |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
American Funds and Meta Platforms Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Funds and Meta Platforms
The main advantage of trading using opposite American Funds and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.American Funds vs. State Farm Growth | American Funds vs. Income Fund Of | American Funds vs. American Funds 2015 | American Funds vs. New World Fund |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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