Correlation Between Mirle Automation and Merry Electronics
Can any of the company-specific risk be diversified away by investing in both Mirle Automation and Merry Electronics 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 Mirle Automation and Merry Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirle Automation Corp and Merry Electronics Co, you can compare the effects of market volatilities on Mirle Automation and Merry Electronics 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 Mirle Automation with a short position of Merry Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirle Automation and Merry Electronics.
Diversification Opportunities for Mirle Automation and Merry Electronics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mirle and Merry is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mirle Automation Corp and Merry Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merry Electronics and Mirle Automation 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 Mirle Automation Corp are associated (or correlated) with Merry Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merry Electronics has no effect on the direction of Mirle Automation i.e., Mirle Automation and Merry Electronics go up and down completely randomly.
Pair Corralation between Mirle Automation and Merry Electronics
Assuming the 90 days trading horizon Mirle Automation Corp is expected to generate 1.58 times more return on investment than Merry Electronics. However, Mirle Automation is 1.58 times more volatile than Merry Electronics Co. It trades about 0.04 of its potential returns per unit of risk. Merry Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 6,850 in Mirle Automation Corp on August 29, 2024 and sell it today you would earn a total of 600.00 from holding Mirle Automation Corp or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirle Automation Corp vs. Merry Electronics Co
Performance |
| Timeline |
| Mirle Automation Corp |
| Merry Electronics |
Mirle Automation and Merry Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirle Automation and Merry Electronics
The main advantage of trading using opposite Mirle Automation and Merry Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirle Automation position performs unexpectedly, Merry Electronics 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 Merry Electronics will offset losses from the drop in Merry Electronics' long position.| Mirle Automation vs. Yulon Motor Co | Mirle Automation vs. Far Eastern Department | Mirle Automation vs. China Steel Corp | Mirle Automation vs. Chang Hwa Commercial |
| Merry Electronics vs. Chung Hwa Food | Merry Electronics vs. Oceanic Beverages Co | Merry Electronics vs. Alchip Technologies | Merry Electronics vs. United Radiant Technology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| CEOs Directory Screen CEOs from public companies around the world |