Correlation Between Meiloon Industrial and Delta Electronics
Can any of the company-specific risk be diversified away by investing in both Meiloon Industrial and Delta 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 Meiloon Industrial and Delta Electronics 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 Delta Electronics, you can compare the effects of market volatilities on Meiloon Industrial and Delta 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 Meiloon Industrial with a short position of Delta Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiloon Industrial and Delta Electronics.
Diversification Opportunities for Meiloon Industrial and Delta Electronics
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meiloon and Delta is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Meiloon Industrial Co and Delta Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Electronics 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 Delta Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Electronics has no effect on the direction of Meiloon Industrial i.e., Meiloon Industrial and Delta Electronics go up and down completely randomly.
Pair Corralation between Meiloon Industrial and Delta Electronics
Assuming the 90 days trading horizon Meiloon Industrial Co is expected to under-perform the Delta Electronics. In addition to that, Meiloon Industrial is 2.13 times more volatile than Delta Electronics. It trades about -0.3 of its total potential returns per unit of risk. Delta Electronics is currently generating about -0.17 per unit of volatility. If you would invest 40,600 in Delta Electronics on August 30, 2024 and sell it today you would lose (2,000) from holding Delta Electronics or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiloon Industrial Co vs. Delta Electronics
Performance |
| Timeline |
| Meiloon Industrial |
| Delta Electronics |
Meiloon Industrial and Delta Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiloon Industrial and Delta Electronics
The main advantage of trading using opposite Meiloon Industrial and Delta Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiloon Industrial position performs unexpectedly, Delta 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 Delta Electronics will offset losses from the drop in Delta Electronics' long position.| Meiloon Industrial vs. Hanpin Electron Co | Meiloon Industrial vs. Stark Technology | Meiloon Industrial vs. Ichia Technologies | Meiloon Industrial vs. Zinwell |
| Delta Electronics vs. Quanta Computer | Delta Electronics vs. Hon Hai Precision | Delta Electronics vs. United Microelectronics | Delta Electronics vs. LARGAN Precision Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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