Correlation Between Meta Platforms and Infinite

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

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

Diversification Opportunities for Meta Platforms and Infinite

-0.01
  Correlation Coefficient
Meta Platforms
Infinite Group

Good diversification

The 3 months correlation between Meta Platforms and Infinite is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Infinite Group in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Infinite Group 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 Infinite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinite Group has no effect on the direction of Meta Platforms i.e., Meta Platforms and Infinite go up and down completely randomly.

Pair Corralation between Meta Platforms and Infinite

Allowing for the 90-day total investment horizon Meta Platforms is expected to under-perform the Infinite. But the stock apears to be less risky and, when comparing its historical volatility, Meta Platforms is 4.48 times less risky than Infinite. The stock trades about -0.05 of its potential returns per unit of risk. The Infinite Group is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  8.00  in Infinite Group on October 21, 2021 and sell it today you would earn a total of  5.00  from holding Infinite Group or generate 62.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Meta Platforms  vs.  Infinite Group

 Performance (%) 
      Timeline 
Meta Platforms 
Meta Platforms Performance
0 of 100
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 latest stock price disturbance, may contribute to short-term losses for the investors.

Meta Platforms Price Channel

Infinite Group 
Infinite Performance
0 of 100
Over the last 90 days Infinite Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Infinite is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Infinite Price Channel

Meta Platforms and Infinite Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Meta Platforms and Infinite

The main advantage of trading using opposite Meta Platforms and Infinite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Infinite 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 Infinite will offset losses from the drop in Infinite's long position.
The idea behind Meta Platforms and Infinite Group 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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