Correlation Between Meiloon Industrial and Baotek Industrial
Can any of the company-specific risk be diversified away by investing in both Meiloon Industrial and Baotek 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 Meiloon Industrial and Baotek Industrial 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 Baotek Industrial Materials, you can compare the effects of market volatilities on Meiloon Industrial and Baotek 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 Meiloon Industrial with a short position of Baotek Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiloon Industrial and Baotek Industrial.
Diversification Opportunities for Meiloon Industrial and Baotek Industrial
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meiloon and Baotek is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Meiloon Industrial Co and Baotek Industrial Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baotek Industrial 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 Baotek Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baotek Industrial has no effect on the direction of Meiloon Industrial i.e., Meiloon Industrial and Baotek Industrial go up and down completely randomly.
Pair Corralation between Meiloon Industrial and Baotek Industrial
Assuming the 90 days trading horizon Meiloon Industrial Co is expected to generate 1.23 times more return on investment than Baotek Industrial. However, Meiloon Industrial is 1.23 times more volatile than Baotek Industrial Materials. It trades about 0.11 of its potential returns per unit of risk. Baotek Industrial Materials is currently generating about -0.04 per unit of risk. If you would invest 2,195 in Meiloon Industrial Co on August 26, 2024 and sell it today you would earn a total of 1,175 from holding Meiloon Industrial Co or generate 53.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiloon Industrial Co vs. Baotek Industrial Materials
Performance |
| Timeline |
| Meiloon Industrial |
| Baotek Industrial |
Meiloon Industrial and Baotek Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiloon Industrial and Baotek Industrial
The main advantage of trading using opposite Meiloon Industrial and Baotek Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiloon Industrial position performs unexpectedly, Baotek 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 Baotek Industrial will offset losses from the drop in Baotek Industrial's long position.| Meiloon Industrial vs. Taiwan Semiconductor Manufacturing | Meiloon Industrial vs. Hon Hai Precision | Meiloon Industrial vs. MediaTek | Meiloon Industrial vs. Chunghwa Telecom Co |
| Baotek Industrial vs. Eclat Textile Co | Baotek Industrial vs. Ruentex Industries | Baotek Industrial vs. Tainan Spinning Co | Baotek Industrial vs. Shinkong Synthetic Fiber |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |