Correlation Between Meiko Electronics and Chengdu PUTIAN
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Chengdu PUTIAN 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 Chengdu PUTIAN 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 Chengdu PUTIAN Telecommunications, you can compare the effects of market volatilities on Meiko Electronics and Chengdu PUTIAN 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 Chengdu PUTIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Chengdu PUTIAN.
Diversification Opportunities for Meiko Electronics and Chengdu PUTIAN
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Meiko and Chengdu is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Chengdu PUTIAN Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu PUTIAN Telec 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 Chengdu PUTIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu PUTIAN Telec has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Chengdu PUTIAN go up and down completely randomly.
Pair Corralation between Meiko Electronics and Chengdu PUTIAN
Assuming the 90 days horizon Meiko Electronics Co is expected to under-perform the Chengdu PUTIAN. But the stock apears to be less risky and, when comparing its historical volatility, Meiko Electronics Co is 2.47 times less risky than Chengdu PUTIAN. The stock trades about -0.28 of its potential returns per unit of risk. The Chengdu PUTIAN Telecommunications is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6.95 in Chengdu PUTIAN Telecommunications on October 13, 2024 and sell it today you would earn a total of 0.45 from holding Chengdu PUTIAN Telecommunications or generate 6.47% 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. Chengdu PUTIAN Telecommunicati
Performance |
| Timeline |
| Meiko Electronics |
| Chengdu PUTIAN Telec |
Meiko Electronics and Chengdu PUTIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and Chengdu PUTIAN
The main advantage of trading using opposite Meiko Electronics and Chengdu PUTIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Chengdu PUTIAN 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 Chengdu PUTIAN will offset losses from the drop in Chengdu PUTIAN's long position.| Meiko Electronics vs. Laureate Education | Meiko Electronics vs. CLEAN ENERGY FUELS | Meiko Electronics vs. G8 EDUCATION | Meiko Electronics vs. EMBARK EDUCATION LTD |
| Chengdu PUTIAN vs. Meiko Electronics Co | Chengdu PUTIAN vs. AOI Electronics Co | Chengdu PUTIAN vs. ARROW ELECTRONICS | Chengdu PUTIAN vs. PRECISION DRILLING P |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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