Correlation Between Grand Canyon and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both Grand Canyon 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 Grand Canyon and Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Canyon Education and Meiko Electronics Co, you can compare the effects of market volatilities on Grand Canyon 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 Grand Canyon with a short position of Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and Meiko Electronics.
Diversification Opportunities for Grand Canyon and Meiko Electronics
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Grand and Meiko is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and Grand Canyon 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 Grand Canyon Education 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 Grand Canyon i.e., Grand Canyon and Meiko Electronics go up and down completely randomly.
Pair Corralation between Grand Canyon and Meiko Electronics
Assuming the 90 days trading horizon Grand Canyon Education is expected to generate 0.79 times more return on investment than Meiko Electronics. However, Grand Canyon Education is 1.27 times less risky than Meiko Electronics. It trades about -0.13 of its potential returns per unit of risk. Meiko Electronics Co is currently generating about -0.15 per unit of risk. If you would invest 16,100 in Grand Canyon Education on October 12, 2024 and sell it today you would lose (500.00) from holding Grand Canyon Education or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. Meiko Electronics Co
Performance |
| Timeline |
| Grand Canyon Education |
| Meiko Electronics |
Grand Canyon and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and Meiko Electronics
The main advantage of trading using opposite Grand Canyon and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon 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.| Grand Canyon vs. Federal Agricultural Mortgage | Grand Canyon vs. Wyndham Hotels Resorts | Grand Canyon vs. PPHE HOTEL GROUP | Grand Canyon vs. DAIRY FARM INTL |
| Meiko Electronics vs. Sekisui Chemical Co | Meiko Electronics vs. SEKISUI CHEMICAL | Meiko Electronics vs. TRI CHEMICAL LABORATINC | Meiko Electronics vs. Corporate Office Properties |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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