Correlation Between Meta Platforms and CarsalesCom
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and CarsalesCom 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 CarsalesCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and CarsalesCom Ltd ADR, you can compare the effects of market volatilities on Meta Platforms and CarsalesCom 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 CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and CarsalesCom.
Diversification Opportunities for Meta Platforms and CarsalesCom
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meta and CarsalesCom is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and CarsalesCom Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom ADR 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 CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom ADR has no effect on the direction of Meta Platforms i.e., Meta Platforms and CarsalesCom go up and down completely randomly.
Pair Corralation between Meta Platforms and CarsalesCom
Given the investment horizon of 90 days Meta Platforms is expected to under-perform the CarsalesCom. But the stock apears to be less risky and, when comparing its historical volatility, Meta Platforms is 1.19 times less risky than CarsalesCom. The stock trades about -0.1 of its potential returns per unit of risk. The CarsalesCom Ltd ADR is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 5,057 in CarsalesCom Ltd ADR on September 3, 2025 and sell it today you would lose (588.00) from holding CarsalesCom Ltd ADR or give up 11.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meta Platforms vs. CarsalesCom Ltd ADR
Performance |
| Timeline |
| Meta Platforms |
| CarsalesCom ADR |
Meta Platforms and CarsalesCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and CarsalesCom
The main advantage of trading using opposite Meta Platforms and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom's long position.| Meta Platforms vs. Astral Foods Limited | Meta Platforms vs. Purple Beverage | Meta Platforms vs. Bridgford Foods | Meta Platforms vs. Nates Food Co |
| CarsalesCom vs. Electreon Wireless | CarsalesCom vs. Technology Telecommunication Acquisition | CarsalesCom vs. Forum Mobile | CarsalesCom vs. Gamma Communications plc |
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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
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