Correlation Between Great Wall and Meiloon Industrial
Can any of the company-specific risk be diversified away by investing in both Great Wall and Meiloon Industrial 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 Great Wall and Meiloon Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Wall Enterprise and Meiloon Industrial Co, you can compare the effects of market volatilities on Great Wall and Meiloon Industrial 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 Great Wall with a short position of Meiloon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Wall and Meiloon Industrial.
Diversification Opportunities for Great Wall and Meiloon Industrial
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great and Meiloon is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Great Wall Enterprise and Meiloon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiloon Industrial and Great Wall 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 Great Wall Enterprise are associated (or correlated) with Meiloon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiloon Industrial has no effect on the direction of Great Wall i.e., Great Wall and Meiloon Industrial go up and down completely randomly.
Pair Corralation between Great Wall and Meiloon Industrial
Assuming the 90 days trading horizon Great Wall Enterprise is expected to under-perform the Meiloon Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Great Wall Enterprise is 3.6 times less risky than Meiloon Industrial. The stock trades about 0.0 of its potential returns per unit of risk. The Meiloon Industrial Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,250 in Meiloon Industrial Co on November 28, 2024 and sell it today you would earn a total of 600.00 from holding Meiloon Industrial Co or generate 26.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.45% |
| Values | Daily Returns |
Great Wall Enterprise vs. Meiloon Industrial Co
Performance |
| Timeline |
| Great Wall Enterprise |
| Meiloon Industrial |
Great Wall and Meiloon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Wall and Meiloon Industrial
The main advantage of trading using opposite Great Wall and Meiloon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Wall position performs unexpectedly, Meiloon Industrial 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 Meiloon Industrial will offset losses from the drop in Meiloon Industrial's long position.| Great Wall vs. Charoen Pokphand Enterprise | Great Wall vs. Uni President Enterprises Corp | Great Wall vs. Lien Hwa Industrial | Great Wall vs. Standard Foods Corp |
| Meiloon Industrial vs. Hanpin Electron Co | Meiloon Industrial vs. Stark Technology | Meiloon Industrial vs. Ichia Technologies | Meiloon Industrial vs. Zinwell |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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