Correlation Between Fukuyama Transporting and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both Fukuyama Transporting 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 Fukuyama Transporting and Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fukuyama Transporting Co and Meiko Electronics Co, you can compare the effects of market volatilities on Fukuyama Transporting 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 Fukuyama Transporting with a short position of Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fukuyama Transporting and Meiko Electronics.
Diversification Opportunities for Fukuyama Transporting and Meiko Electronics
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fukuyama and Meiko is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fukuyama Transporting Co and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and Fukuyama Transporting 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 Fukuyama Transporting Co 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 Fukuyama Transporting i.e., Fukuyama Transporting and Meiko Electronics go up and down completely randomly.
Pair Corralation between Fukuyama Transporting and Meiko Electronics
Assuming the 90 days horizon Fukuyama Transporting is expected to generate 2547.5 times less return on investment than Meiko Electronics. But when comparing it to its historical volatility, Fukuyama Transporting Co is 1.83 times less risky than Meiko Electronics. It trades about 0.0 of its potential returns per unit of risk. Meiko Electronics Co is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 3,660 in Meiko Electronics Co on September 1, 2024 and sell it today you would earn a total of 1,890 from holding Meiko Electronics Co or generate 51.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fukuyama Transporting Co vs. Meiko Electronics Co
Performance |
| Timeline |
| Fukuyama Transporting |
| Meiko Electronics |
Fukuyama Transporting and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fukuyama Transporting and Meiko Electronics
The main advantage of trading using opposite Fukuyama Transporting and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fukuyama Transporting 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.| Fukuyama Transporting vs. Werner Enterprises | Fukuyama Transporting vs. Seino Holdings Co | Fukuyama Transporting vs. Superior Plus Corp | Fukuyama Transporting vs. NMI Holdings |
| Meiko Electronics vs. Astral Foods Limited | Meiko Electronics vs. Choice Hotels International | Meiko Electronics vs. MELIA HOTELS | Meiko Electronics vs. HYATT HOTELS A |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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