Correlation Between Meiko Electronics and BANK CENTRAL
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and BANK CENTRAL 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 BANK CENTRAL 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 BANK CENTRAL ASIA, you can compare the effects of market volatilities on Meiko Electronics and BANK CENTRAL 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 BANK CENTRAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and BANK CENTRAL.
Diversification Opportunities for Meiko Electronics and BANK CENTRAL
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meiko and BANK is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and BANK CENTRAL ASIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK CENTRAL ASIA 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 BANK CENTRAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK CENTRAL ASIA has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and BANK CENTRAL go up and down completely randomly.
Pair Corralation between Meiko Electronics and BANK CENTRAL
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 2.01 times more return on investment than BANK CENTRAL. However, Meiko Electronics is 2.01 times more volatile than BANK CENTRAL ASIA. It trades about 0.08 of its potential returns per unit of risk. BANK CENTRAL ASIA is currently generating about 0.02 per unit of risk. If you would invest 1,990 in Meiko Electronics Co on October 19, 2024 and sell it today you would earn a total of 3,310 from holding Meiko Electronics Co or generate 166.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. BANK CENTRAL ASIA
Performance |
| Timeline |
| Meiko Electronics |
| BANK CENTRAL ASIA |
Meiko Electronics and BANK CENTRAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and BANK CENTRAL
The main advantage of trading using opposite Meiko Electronics and BANK CENTRAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, BANK CENTRAL 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 BANK CENTRAL will offset losses from the drop in BANK CENTRAL's long position.| Meiko Electronics vs. Singapore Telecommunications Limited | Meiko Electronics vs. Cairo Communication SpA | Meiko Electronics vs. COVIVIO HOTELS INH | Meiko Electronics vs. Choice Hotels International |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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