Correlation Between Meiko Electronics and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Park Hotels 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 Park Hotels 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 Park Hotels Resorts, you can compare the effects of market volatilities on Meiko Electronics and Park Hotels 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 Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Park Hotels.
Diversification Opportunities for Meiko Electronics and Park Hotels
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meiko and Park is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts 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 Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Park Hotels go up and down completely randomly.
Pair Corralation between Meiko Electronics and Park Hotels
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 0.85 times more return on investment than Park Hotels. However, Meiko Electronics Co is 1.18 times less risky than Park Hotels. It trades about -0.06 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about -0.07 per unit of risk. If you would invest 5,550 in Meiko Electronics Co on October 30, 2024 and sell it today you would lose (100.00) from holding Meiko Electronics Co or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. Park Hotels Resorts
Performance |
| Timeline |
| Meiko Electronics |
| Park Hotels Resorts |
Meiko Electronics and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and Park Hotels
The main advantage of trading using opposite Meiko Electronics and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Park Hotels 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 Park Hotels will offset losses from the drop in Park Hotels' long position.| Meiko Electronics vs. PARKEN Sport Entertainment | Meiko Electronics vs. BRIT AMER TOBACCO | Meiko Electronics vs. Transport International Holdings | Meiko Electronics vs. COLUMBIA SPORTSWEAR |
| Park Hotels vs. X FAB Silicon Foundries | Park Hotels vs. PKSHA TECHNOLOGY INC | Park Hotels vs. Sunny Optical Technology | Park Hotels vs. Lamar Advertising |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |