Correlation Between FineMat Applied and Meiloon Industrial
Can any of the company-specific risk be diversified away by investing in both FineMat Applied and Meiloon 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 FineMat Applied and Meiloon Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FineMat Applied Materials and Meiloon Industrial Co, you can compare the effects of market volatilities on FineMat Applied and Meiloon 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 FineMat Applied with a short position of Meiloon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FineMat Applied and Meiloon Industrial.
Diversification Opportunities for FineMat Applied and Meiloon Industrial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between FineMat and Meiloon is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding FineMat Applied Materials and Meiloon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiloon Industrial and FineMat Applied 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 FineMat Applied Materials are associated (or correlated) with Meiloon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiloon Industrial has no effect on the direction of FineMat Applied i.e., FineMat Applied and Meiloon Industrial go up and down completely randomly.
Pair Corralation between FineMat Applied and Meiloon Industrial
Assuming the 90 days trading horizon FineMat Applied Materials is expected to generate 0.59 times more return on investment than Meiloon Industrial. However, FineMat Applied Materials is 1.71 times less risky than Meiloon Industrial. It trades about -0.24 of its potential returns per unit of risk. Meiloon Industrial Co is currently generating about -0.3 per unit of risk. If you would invest 4,095 in FineMat Applied Materials on August 30, 2024 and sell it today you would lose (340.00) from holding FineMat Applied Materials or give up 8.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FineMat Applied Materials vs. Meiloon Industrial Co
Performance |
| Timeline |
| FineMat Applied Materials |
| Meiloon Industrial |
FineMat Applied and Meiloon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FineMat Applied and Meiloon Industrial
The main advantage of trading using opposite FineMat Applied and Meiloon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FineMat Applied position performs unexpectedly, Meiloon 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 Meiloon Industrial will offset losses from the drop in Meiloon Industrial's long position.| FineMat Applied vs. Hon Hai Precision | FineMat Applied vs. Delta Electronics | FineMat Applied vs. LARGAN Precision Co | FineMat Applied vs. E Ink Holdings |
| Meiloon Industrial vs. Yulon Finance Corp | Meiloon Industrial vs. Taiwan Secom Co | Meiloon Industrial vs. Great Wall Enterprise |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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