Correlation Between Meiko Electronics and ASOS PLC
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and ASOS PLC 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 ASOS PLC 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 ASOS PLC, you can compare the effects of market volatilities on Meiko Electronics and ASOS PLC 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 ASOS PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and ASOS PLC.
Diversification Opportunities for Meiko Electronics and ASOS PLC
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meiko and ASOS is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and ASOS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASOS PLC 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 ASOS PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASOS PLC has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and ASOS PLC go up and down completely randomly.
Pair Corralation between Meiko Electronics and ASOS PLC
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 0.89 times more return on investment than ASOS PLC. However, Meiko Electronics Co is 1.12 times less risky than ASOS PLC. It trades about 0.12 of its potential returns per unit of risk. ASOS PLC is currently generating about 0.02 per unit of risk. If you would invest 1,690 in Meiko Electronics Co on September 12, 2024 and sell it today you would earn a total of 3,910 from holding Meiko Electronics Co or generate 231.36% 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. ASOS PLC
Performance |
| Timeline |
| Meiko Electronics |
| ASOS PLC |
Meiko Electronics and ASOS PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and ASOS PLC
The main advantage of trading using opposite Meiko Electronics and ASOS PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, ASOS PLC 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 ASOS PLC will offset losses from the drop in ASOS PLC's long position.| Meiko Electronics vs. Benchmark Electronics | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. SIVERS SEMICONDUCTORS AB | Meiko Electronics vs. Norsk Hydro ASA |
| ASOS PLC vs. Virtus Investment Partners | ASOS PLC vs. NH HOTEL GROUP | ASOS PLC vs. INTERCONT HOTELS | ASOS PLC vs. Meli Hotels International |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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