Correlation Between Meiko Electronics and ELECTRONIC ARTS
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and ELECTRONIC ARTS 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 ELECTRONIC ARTS 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 ELECTRONIC ARTS, you can compare the effects of market volatilities on Meiko Electronics and ELECTRONIC ARTS 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 ELECTRONIC ARTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and ELECTRONIC ARTS.
Diversification Opportunities for Meiko Electronics and ELECTRONIC ARTS
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meiko and ELECTRONIC is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS 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 ELECTRONIC ARTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECTRONIC ARTS has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and ELECTRONIC ARTS go up and down completely randomly.
Pair Corralation between Meiko Electronics and ELECTRONIC ARTS
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 2.95 times more return on investment than ELECTRONIC ARTS. However, Meiko Electronics is 2.95 times more volatile than ELECTRONIC ARTS. It trades about 0.09 of its potential returns per unit of risk. ELECTRONIC ARTS is currently generating about 0.15 per unit of risk. If you would invest 4,060 in Meiko Electronics Co on September 2, 2024 and sell it today you would earn a total of 1,640 from holding Meiko Electronics Co or generate 40.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. ELECTRONIC ARTS
Performance |
| Timeline |
| Meiko Electronics |
| ELECTRONIC ARTS |
Meiko Electronics and ELECTRONIC ARTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and ELECTRONIC ARTS
The main advantage of trading using opposite Meiko Electronics and ELECTRONIC ARTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, ELECTRONIC ARTS 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 ELECTRONIC ARTS will offset losses from the drop in ELECTRONIC ARTS's long position.| Meiko Electronics vs. GRIFFIN MINING LTD | Meiko Electronics vs. Jacquet Metal Service | Meiko Electronics vs. Federal Agricultural Mortgage | Meiko Electronics vs. Harmony Gold Mining |
| ELECTRONIC ARTS vs. PTT Global Chemical | ELECTRONIC ARTS vs. Eastman Chemical | ELECTRONIC ARTS vs. NISSAN CHEMICAL IND | ELECTRONIC ARTS vs. Silicon Motion Technology |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |