Correlation Between Meiko Electronics and Comba Telecom
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Comba Telecom 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 Comba Telecom 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 Comba Telecom Systems, you can compare the effects of market volatilities on Meiko Electronics and Comba Telecom 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 Comba Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Comba Telecom.
Diversification Opportunities for Meiko Electronics and Comba Telecom
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meiko and Comba is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Comba Telecom Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comba Telecom Systems 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 Comba Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comba Telecom Systems has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Comba Telecom go up and down completely randomly.
Pair Corralation between Meiko Electronics and Comba Telecom
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 0.61 times more return on investment than Comba Telecom. However, Meiko Electronics Co is 1.63 times less risky than Comba Telecom. It trades about 0.12 of its potential returns per unit of risk. Comba Telecom Systems is currently generating about 0.02 per unit of risk. If you would invest 1,590 in Meiko Electronics Co on August 31, 2024 and sell it today you would earn a total of 3,960 from holding Meiko Electronics Co or generate 249.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Meiko Electronics Co vs. Comba Telecom Systems
Performance |
| Timeline |
| Meiko Electronics |
| Comba Telecom Systems |
Meiko Electronics and Comba Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and Comba Telecom
The main advantage of trading using opposite Meiko Electronics and Comba Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Comba Telecom 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 Comba Telecom will offset losses from the drop in Comba Telecom's long position.| Meiko Electronics vs. Plexus Corp | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. NMI Holdings | Meiko Electronics vs. Origin Agritech |
| Comba Telecom vs. MeVis Medical Solutions | Comba Telecom vs. Carsales | Comba Telecom vs. GungHo Online Entertainment | Comba Telecom vs. SAFETY MEDICAL PROD |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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