Correlation Between Meta Platforms and Stingray

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

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

Diversification Opportunities for Meta Platforms and Stingray

0.19

Correlation Coefficient

Meta Platforms  Stingray

Average diversification

The 3 months correlation between Meta and Stingray is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Stingray Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stingray 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 Stingray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stingray Group has no effect on the direction of Meta Platforms i.e., Meta Platforms and Stingray go up and down completely randomly.

Pair Corralation between Meta Platforms and Stingray

Given the investment horizon of 90 days Meta Platforms is expected to generate 6.74 times less return on investment than Stingray. But when comparing it to its historical volatility, Meta Platforms is 1.11 times less risky than Stingray. It trades about 0.03 of its potential returns per unit of risk. Stingray Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  512.00  in Stingray Group on December 29, 2024 and sell it today you would earn a total of  122.00  from holding Stingray Group or generate 23.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Meta Platforms  vs.  Stingray Group

Meta Platforms

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Meta Platforms are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Meta Platforms is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Stingray Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Stingray Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Stingray reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Meta Platforms and Stingray

The main advantage of trading using opposite Meta Platforms and Stingray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Stingray 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 Stingray will offset losses from the drop in Stingray's long position.

The idea behind Meta Platforms and Stingray 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.