Correlation Between GLG LIFE and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both GLG LIFE 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 GLG LIFE and Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLG LIFE TECH and Meiko Electronics Co, you can compare the effects of market volatilities on GLG LIFE 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 GLG LIFE with a short position of Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and Meiko Electronics.
Diversification Opportunities for GLG LIFE and Meiko Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GLG and Meiko is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and GLG LIFE 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 GLG LIFE TECH 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 GLG LIFE i.e., GLG LIFE and Meiko Electronics go up and down completely randomly.
Pair Corralation between GLG LIFE and Meiko Electronics
If you would invest 4,900 in Meiko Electronics Co on September 14, 2024 and sell it today you would earn a total of 600.00 from holding Meiko Electronics Co or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GLG LIFE TECH vs. Meiko Electronics Co
Performance |
| Timeline |
| GLG LIFE TECH |
| Meiko Electronics |
GLG LIFE and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and Meiko Electronics
The main advantage of trading using opposite GLG LIFE and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE 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.The idea behind GLG LIFE TECH and Meiko Electronics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Meiko Electronics vs. Benchmark Electronics | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. SIVERS SEMICONDUCTORS AB | Meiko Electronics vs. Norsk Hydro ASA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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