Correlation Between Meiko Electronics and Acadia Healthcare
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Acadia Healthcare 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 Acadia Healthcare 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 Acadia Healthcare, you can compare the effects of market volatilities on Meiko Electronics and Acadia Healthcare 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 Acadia Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Acadia Healthcare.
Diversification Opportunities for Meiko Electronics and Acadia Healthcare
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Meiko and Acadia is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Acadia Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Healthcare 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 Acadia Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Healthcare has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Acadia Healthcare go up and down completely randomly.
Pair Corralation between Meiko Electronics and Acadia Healthcare
Assuming the 90 days horizon Meiko Electronics Co is expected to under-perform the Acadia Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Meiko Electronics Co is 1.84 times less risky than Acadia Healthcare. The stock trades about -0.28 of its potential returns per unit of risk. The Acadia Healthcare is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 3,680 in Acadia Healthcare on October 13, 2024 and sell it today you would earn a total of 680.00 from holding Acadia Healthcare or generate 18.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. Acadia Healthcare
Performance |
| Timeline |
| Meiko Electronics |
| Acadia Healthcare |
Meiko Electronics and Acadia Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and Acadia Healthcare
The main advantage of trading using opposite Meiko Electronics and Acadia Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Acadia Healthcare 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 Acadia Healthcare will offset losses from the drop in Acadia Healthcare's long position.| Meiko Electronics vs. Sekisui Chemical Co | Meiko Electronics vs. SEKISUI CHEMICAL | Meiko Electronics vs. TRI CHEMICAL LABORATINC | Meiko Electronics vs. Corporate Office Properties |
| Acadia Healthcare vs. Meiko Electronics Co | Acadia Healthcare vs. Nanjing Panda Electronics | Acadia Healthcare vs. Take Two Interactive Software | Acadia Healthcare vs. ARROW ELECTRONICS |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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