Correlation Between Meiko Electronics and FORMPIPE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB, you can compare the effects of market volatilities on Meiko Electronics and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and FORMPIPE SOFTWARE.
Diversification Opportunities for Meiko Electronics and FORMPIPE SOFTWARE
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meiko and FORMPIPE is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and FORMPIPE SOFTWARE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORMPIPE SOFTWARE has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and FORMPIPE SOFTWARE go up and down completely randomly.
Pair Corralation between Meiko Electronics and FORMPIPE SOFTWARE
Assuming the 90 days horizon Meiko Electronics Co is expected to under-perform the FORMPIPE SOFTWARE. But the stock apears to be less risky and, when comparing its historical volatility, Meiko Electronics Co is 2.58 times less risky than FORMPIPE SOFTWARE. The stock trades about -0.17 of its potential returns per unit of risk. The FORMPIPE SOFTWARE AB is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 200.00 in FORMPIPE SOFTWARE AB on October 20, 2024 and sell it today you would earn a total of 18.00 from holding FORMPIPE SOFTWARE AB or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. FORMPIPE SOFTWARE AB
Performance |
| Timeline |
| Meiko Electronics |
| FORMPIPE SOFTWARE |
Meiko Electronics and FORMPIPE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and FORMPIPE SOFTWARE
The main advantage of trading using opposite Meiko Electronics and FORMPIPE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE will offset losses from the drop in FORMPIPE SOFTWARE's long position.| Meiko Electronics vs. HEMISPHERE EGY | Meiko Electronics vs. Rocket Internet SE | Meiko Electronics vs. INTERSHOP Communications Aktiengesellschaft | Meiko Electronics vs. Casio Computer CoLtd |
| FORMPIPE SOFTWARE vs. Virtu Financial | FORMPIPE SOFTWARE vs. Unity Software | FORMPIPE SOFTWARE vs. Check Point Software | FORMPIPE SOFTWARE vs. Direct Line Insurance |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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