Correlation Between Meiko Electronics and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Fast Retailing 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 Fast Retailing 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 Fast Retailing Co, you can compare the effects of market volatilities on Meiko Electronics and Fast Retailing 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 Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Fast Retailing.
Diversification Opportunities for Meiko Electronics and Fast Retailing
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meiko and Fast is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Fast Retailing go up and down completely randomly.
Pair Corralation between Meiko Electronics and Fast Retailing
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 2.75 times more return on investment than Fast Retailing. However, Meiko Electronics is 2.75 times more volatile than Fast Retailing Co. It trades about 0.52 of its potential returns per unit of risk. Fast Retailing Co is currently generating about 0.18 per unit of risk. If you would invest 3,400 in Meiko Electronics Co on September 3, 2024 and sell it today you would earn a total of 2,300 from holding Meiko Electronics Co or generate 67.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. Fast Retailing Co
Performance |
| Timeline |
| Meiko Electronics |
| Fast Retailing |
Meiko Electronics and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and Fast Retailing
The main advantage of trading using opposite Meiko Electronics and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing's long position.| Meiko Electronics vs. KCE EL PCL | Meiko Electronics vs. Benchmark Electronics | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. NMI Holdings |
| Fast Retailing vs. TOTAL GABON | Fast Retailing vs. Walgreens Boots Alliance | Fast Retailing vs. Peak Resources Limited |
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.
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