Correlation Between Chengdu PUTIAN and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both Chengdu PUTIAN 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 Chengdu PUTIAN and Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chengdu PUTIAN Telecommunications and Meiko Electronics Co, you can compare the effects of market volatilities on Chengdu PUTIAN 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 Chengdu PUTIAN with a short position of Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu PUTIAN and Meiko Electronics.
Diversification Opportunities for Chengdu PUTIAN and Meiko Electronics
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chengdu and Meiko is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu PUTIAN Telecommunicati and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and Chengdu PUTIAN 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 Chengdu PUTIAN Telecommunications 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 Chengdu PUTIAN i.e., Chengdu PUTIAN and Meiko Electronics go up and down completely randomly.
Pair Corralation between Chengdu PUTIAN and Meiko Electronics
Assuming the 90 days trading horizon Chengdu PUTIAN Telecommunications is expected to generate 2.47 times more return on investment than Meiko Electronics. However, Chengdu PUTIAN is 2.47 times more volatile than Meiko Electronics Co. It trades about 0.12 of its potential returns per unit of risk. Meiko Electronics Co is currently generating about -0.28 per unit of risk. If you would invest 6.95 in Chengdu PUTIAN Telecommunications on October 13, 2024 and sell it today you would earn a total of 0.45 from holding Chengdu PUTIAN Telecommunications or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu PUTIAN Telecommunicati vs. Meiko Electronics Co
Performance |
| Timeline |
| Chengdu PUTIAN Telec |
| Meiko Electronics |
Chengdu PUTIAN and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu PUTIAN and Meiko Electronics
The main advantage of trading using opposite Chengdu PUTIAN and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu PUTIAN 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.| Chengdu PUTIAN vs. Meiko Electronics Co | Chengdu PUTIAN vs. AOI Electronics Co | Chengdu PUTIAN vs. ARROW ELECTRONICS | Chengdu PUTIAN vs. PRECISION DRILLING P |
| Meiko Electronics vs. Laureate Education | Meiko Electronics vs. CLEAN ENERGY FUELS | Meiko Electronics vs. G8 EDUCATION | Meiko Electronics vs. EMBARK EDUCATION LTD |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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