Correlation Between Meiko Electronics and HUTCHISON TELECOMM
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and HUTCHISON TELECOMM 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 HUTCHISON TELECOMM 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 HUTCHISON TELECOMM, you can compare the effects of market volatilities on Meiko Electronics and HUTCHISON TELECOMM 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 HUTCHISON TELECOMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and HUTCHISON TELECOMM.
Diversification Opportunities for Meiko Electronics and HUTCHISON TELECOMM
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Meiko and HUTCHISON is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and HUTCHISON TELECOMM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUTCHISON TELECOMM 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 HUTCHISON TELECOMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUTCHISON TELECOMM has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and HUTCHISON TELECOMM go up and down completely randomly.
Pair Corralation between Meiko Electronics and HUTCHISON TELECOMM
Assuming the 90 days horizon Meiko Electronics Co is expected to under-perform the HUTCHISON TELECOMM. But the stock apears to be less risky and, when comparing its historical volatility, Meiko Electronics Co is 2.29 times less risky than HUTCHISON TELECOMM. The stock trades about -0.14 of its potential returns per unit of risk. The HUTCHISON TELECOMM is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1.35 in HUTCHISON TELECOMM on October 11, 2024 and sell it today you would earn a total of 0.05 from holding HUTCHISON TELECOMM or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. HUTCHISON TELECOMM
Performance |
| Timeline |
| Meiko Electronics |
| HUTCHISON TELECOMM |
Meiko Electronics and HUTCHISON TELECOMM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and HUTCHISON TELECOMM
The main advantage of trading using opposite Meiko Electronics and HUTCHISON TELECOMM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, HUTCHISON TELECOMM 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 HUTCHISON TELECOMM will offset losses from the drop in HUTCHISON TELECOMM's long position.| Meiko Electronics vs. ETFS Coffee ETC | Meiko Electronics vs. Playtech plc | Meiko Electronics vs. COLUMBIA SPORTSWEAR | Meiko Electronics vs. SCANSOURCE |
| HUTCHISON TELECOMM vs. ANGLO ASIAN MINING | HUTCHISON TELECOMM vs. Endeavour Mining PLC | HUTCHISON TELECOMM vs. Meiko Electronics Co | HUTCHISON TELECOMM vs. Globex Mining Enterprises |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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