Correlation Between Concraft Holding and Merry Electronics
Can any of the company-specific risk be diversified away by investing in both Concraft Holding 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 Concraft Holding and Merry Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concraft Holding Co and Merry Electronics Co, you can compare the effects of market volatilities on Concraft Holding 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 Concraft Holding with a short position of Merry Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concraft Holding and Merry Electronics.
Diversification Opportunities for Concraft Holding and Merry Electronics
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Concraft and Merry is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Concraft Holding Co and Merry Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merry Electronics and Concraft Holding 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 Concraft Holding Co 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 Concraft Holding i.e., Concraft Holding and Merry Electronics go up and down completely randomly.
Pair Corralation between Concraft Holding and Merry Electronics
Assuming the 90 days trading horizon Concraft Holding Co is expected to under-perform the Merry Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Concraft Holding Co is 1.16 times less risky than Merry Electronics. The stock trades about -0.32 of its potential returns per unit of risk. The Merry Electronics Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 10,650 in Merry Electronics Co on September 2, 2024 and sell it today you would lose (50.00) from holding Merry Electronics Co or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concraft Holding Co vs. Merry Electronics Co
Performance |
| Timeline |
| Concraft Holding |
| Merry Electronics |
Concraft Holding and Merry Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concraft Holding and Merry Electronics
The main advantage of trading using opposite Concraft Holding and Merry Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concraft Holding 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.| Concraft Holding vs. Hon Hai Precision | Concraft Holding vs. Delta Electronics | Concraft Holding vs. LARGAN Precision Co | Concraft Holding vs. Yageo Corp |
| Merry Electronics vs. Asia Metal Industries | Merry Electronics vs. Chunghwa Telecom Co | Merry Electronics vs. Oceanic Beverages Co | Merry Electronics vs. Chief Telecom |
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 Stocks Directory module to find actively traded stocks across global markets.
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