Correlation Between Meiko Electronics and INTER CARS
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and INTER CARS 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 Meiko Electronics and INTER CARS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meiko Electronics Co and INTER CARS SA, you can compare the effects of market volatilities on Meiko Electronics and INTER CARS 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 Meiko Electronics with a short position of INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and INTER CARS.
Diversification Opportunities for Meiko Electronics and INTER CARS
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meiko and INTER is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA and Meiko Electronics 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 Meiko Electronics Co are associated (or correlated) with INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and INTER CARS go up and down completely randomly.
Pair Corralation between Meiko Electronics and INTER CARS
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.4 times more return on investment than INTER CARS. However, Meiko Electronics is 1.4 times more volatile than INTER CARS SA. It trades about 0.08 of its potential returns per unit of risk. INTER CARS SA is currently generating about 0.03 per unit of risk. If you would invest 2,040 in Meiko Electronics Co on September 3, 2024 and sell it today you would earn a total of 3,660 from holding Meiko Electronics Co or generate 179.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. INTER CARS SA
Performance |
| Timeline |
| Meiko Electronics |
| INTER CARS SA |
Meiko Electronics and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and INTER CARS
The main advantage of trading using opposite Meiko Electronics and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, INTER CARS 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 INTER CARS will offset losses from the drop in INTER CARS's long position.| Meiko Electronics vs. KCE EL PCL | Meiko Electronics vs. Benchmark Electronics | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. NMI Holdings |
| INTER CARS vs. MOVIE GAMES SA | INTER CARS vs. FRACTAL GAMING GROUP | INTER CARS vs. Constellation Software | INTER CARS vs. Alfa Financial Software |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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