Correlation Between PLAYMATES TOYS and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS and Meiko 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 PLAYMATES TOYS and Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and Meiko Electronics Co, you can compare the effects of market volatilities on PLAYMATES TOYS and Meiko 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 PLAYMATES TOYS with a short position of Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and Meiko Electronics.
Diversification Opportunities for PLAYMATES TOYS and Meiko Electronics
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PLAYMATES and Meiko is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and PLAYMATES TOYS 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 PLAYMATES TOYS are associated (or correlated) with Meiko Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiko Electronics has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and Meiko Electronics go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and Meiko Electronics
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to generate 1.99 times more return on investment than Meiko Electronics. However, PLAYMATES TOYS is 1.99 times more volatile than Meiko Electronics Co. It trades about 0.05 of its potential returns per unit of risk. Meiko Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 6.60 in PLAYMATES TOYS on November 7, 2024 and sell it today you would earn a total of 0.20 from holding PLAYMATES TOYS or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYMATES TOYS vs. Meiko Electronics Co
Performance |
| Timeline |
| PLAYMATES TOYS |
| Meiko Electronics |
PLAYMATES TOYS and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and Meiko Electronics
The main advantage of trading using opposite PLAYMATES TOYS and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS position performs unexpectedly, Meiko 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 Meiko Electronics will offset losses from the drop in Meiko Electronics' long position.| PLAYMATES TOYS vs. TOREX SEMICONDUCTOR LTD | PLAYMATES TOYS vs. Cars Inc | PLAYMATES TOYS vs. Chesapeake Utilities | PLAYMATES TOYS vs. Elmos Semiconductor SE |
| Meiko Electronics vs. Mitsubishi Materials | Meiko Electronics vs. Cogent Communications Holdings | Meiko Electronics vs. Hyster Yale Materials Handling | Meiko Electronics vs. Materialise NV |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |