Correlation Between Meiloon Industrial and Camellia Metal
Can any of the company-specific risk be diversified away by investing in both Meiloon Industrial and Camellia Metal 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 Meiloon Industrial and Camellia Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meiloon Industrial Co and Camellia Metal Co, you can compare the effects of market volatilities on Meiloon Industrial and Camellia Metal 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 Meiloon Industrial with a short position of Camellia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiloon Industrial and Camellia Metal.
Diversification Opportunities for Meiloon Industrial and Camellia Metal
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meiloon and Camellia is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Meiloon Industrial Co and Camellia Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Metal and Meiloon Industrial 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 Meiloon Industrial Co are associated (or correlated) with Camellia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Metal has no effect on the direction of Meiloon Industrial i.e., Meiloon Industrial and Camellia Metal go up and down completely randomly.
Pair Corralation between Meiloon Industrial and Camellia Metal
Assuming the 90 days trading horizon Meiloon Industrial Co is expected to under-perform the Camellia Metal. In addition to that, Meiloon Industrial is 1.13 times more volatile than Camellia Metal Co. It trades about -0.25 of its total potential returns per unit of risk. Camellia Metal Co is currently generating about -0.1 per unit of volatility. If you would invest 1,600 in Camellia Metal Co on September 5, 2024 and sell it today you would lose (90.00) from holding Camellia Metal Co or give up 5.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiloon Industrial Co vs. Camellia Metal Co
Performance |
| Timeline |
| Meiloon Industrial |
| Camellia Metal |
Meiloon Industrial and Camellia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiloon Industrial and Camellia Metal
The main advantage of trading using opposite Meiloon Industrial and Camellia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiloon Industrial position performs unexpectedly, Camellia Metal 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 Camellia Metal will offset losses from the drop in Camellia Metal's long position.| Meiloon Industrial vs. Hanpin Electron Co | Meiloon Industrial vs. Stark Technology | Meiloon Industrial vs. Ichia Technologies | Meiloon Industrial vs. Zinwell |
| Camellia Metal vs. Fu Burg Industrial | Camellia Metal vs. Song Ho Industrial | Camellia Metal vs. Chung Hwa Food | Camellia Metal vs. Sunspring Metal Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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