Correlation Between Meiko Electronics and Perdoceo Education
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Perdoceo Education 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 Perdoceo Education 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 Perdoceo Education, you can compare the effects of market volatilities on Meiko Electronics and Perdoceo Education 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 Perdoceo Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Perdoceo Education.
Diversification Opportunities for Meiko Electronics and Perdoceo Education
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Meiko and Perdoceo is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Perdoceo Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perdoceo Education 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 Perdoceo Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perdoceo Education has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Perdoceo Education go up and down completely randomly.
Pair Corralation between Meiko Electronics and Perdoceo Education
Assuming the 90 days horizon Meiko Electronics Co is expected to under-perform the Perdoceo Education. In addition to that, Meiko Electronics is 1.65 times more volatile than Perdoceo Education. It trades about -0.03 of its total potential returns per unit of risk. Perdoceo Education is currently generating about 0.22 per unit of volatility. If you would invest 2,540 in Perdoceo Education on November 3, 2024 and sell it today you would earn a total of 160.00 from holding Perdoceo Education or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. Perdoceo Education
Performance |
| Timeline |
| Meiko Electronics |
| Perdoceo Education |
Meiko Electronics and Perdoceo Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and Perdoceo Education
The main advantage of trading using opposite Meiko Electronics and Perdoceo Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Perdoceo Education 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 Perdoceo Education will offset losses from the drop in Perdoceo Education's long position.| Meiko Electronics vs. ecotel communication ag | Meiko Electronics vs. T Mobile | Meiko Electronics vs. Haverty Furniture Companies | Meiko Electronics vs. American Homes 4 |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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