Correlation Between Meiko Electronics and CSL
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and CSL 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 CSL 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 CSL LTD SPONADR, you can compare the effects of market volatilities on Meiko Electronics and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and CSL.
Diversification Opportunities for Meiko Electronics and CSL
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meiko and CSL is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and CSL LTD SPONADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL LTD SPONADR 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL LTD SPONADR has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and CSL go up and down completely randomly.
Pair Corralation between Meiko Electronics and CSL
Assuming the 90 days horizon Meiko Electronics Co is expected to under-perform the CSL. In addition to that, Meiko Electronics is 2.07 times more volatile than CSL LTD SPONADR. It trades about -0.03 of its total potential returns per unit of risk. CSL LTD SPONADR is currently generating about -0.05 per unit of volatility. If you would invest 8,300 in CSL LTD SPONADR on November 2, 2024 and sell it today you would lose (100.00) from holding CSL LTD SPONADR or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. CSL LTD SPONADR
Performance |
| Timeline |
| Meiko Electronics |
| CSL LTD SPONADR |
Meiko Electronics and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and CSL
The main advantage of trading using opposite Meiko Electronics and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Meiko Electronics vs. Apollo Investment Corp | Meiko Electronics vs. ECHO INVESTMENT ZY | Meiko Electronics vs. International Consolidated Airlines | Meiko Electronics vs. Scottish Mortgage Investment |
| CSL vs. AGNC INVESTMENT | CSL vs. Guangdong Investment Limited | CSL vs. VULCAN MATERIALS | CSL vs. Martin Marietta Materials |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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