Correlation Between Meiko Electronics and Fukuyama Transporting
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Fukuyama Transporting 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 Fukuyama Transporting 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 Fukuyama Transporting Co, you can compare the effects of market volatilities on Meiko Electronics and Fukuyama Transporting 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 Fukuyama Transporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Fukuyama Transporting.
Diversification Opportunities for Meiko Electronics and Fukuyama Transporting
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meiko and Fukuyama is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Fukuyama Transporting Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fukuyama Transporting 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 Fukuyama Transporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fukuyama Transporting has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Fukuyama Transporting go up and down completely randomly.
Pair Corralation between Meiko Electronics and Fukuyama Transporting
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.52 times more return on investment than Fukuyama Transporting. However, Meiko Electronics is 1.52 times more volatile than Fukuyama Transporting Co. It trades about 0.09 of its potential returns per unit of risk. Fukuyama Transporting Co is currently generating about 0.05 per unit of risk. If you would invest 1,840 in Meiko Electronics Co on September 3, 2024 and sell it today you would earn a total of 3,860 from holding Meiko Electronics Co or generate 209.78% 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. Fukuyama Transporting Co
Performance |
| Timeline |
| Meiko Electronics |
| Fukuyama Transporting |
Meiko Electronics and Fukuyama Transporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and Fukuyama Transporting
The main advantage of trading using opposite Meiko Electronics and Fukuyama Transporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Fukuyama Transporting 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 Fukuyama Transporting will offset losses from the drop in Fukuyama Transporting'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 |
| Fukuyama Transporting vs. Direct Line Insurance | Fukuyama Transporting vs. T MOBILE INCDL 00001 | Fukuyama Transporting vs. REVO INSURANCE SPA | Fukuyama Transporting vs. COMBA TELECOM SYST |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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