Correlation Between Meiko Electronics and Iberdrola
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Iberdrola 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 Iberdrola 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 Iberdrola SA, you can compare the effects of market volatilities on Meiko Electronics and Iberdrola 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 Iberdrola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Iberdrola.
Diversification Opportunities for Meiko Electronics and Iberdrola
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meiko and Iberdrola is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Iberdrola SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iberdrola SA 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 Iberdrola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iberdrola SA has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Iberdrola go up and down completely randomly.
Pair Corralation between Meiko Electronics and Iberdrola
Assuming the 90 days horizon Meiko Electronics Co is expected to under-perform the Iberdrola. In addition to that, Meiko Electronics is 1.24 times more volatile than Iberdrola SA. It trades about -0.1 of its total potential returns per unit of risk. Iberdrola SA is currently generating about 0.16 per unit of volatility. If you would invest 1,285 in Iberdrola SA on October 24, 2024 and sell it today you would earn a total of 44.00 from holding Iberdrola SA or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Meiko Electronics Co vs. Iberdrola SA
Performance |
| Timeline |
| Meiko Electronics |
| Iberdrola SA |
Meiko Electronics and Iberdrola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and Iberdrola
The main advantage of trading using opposite Meiko Electronics and Iberdrola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Iberdrola 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 Iberdrola will offset losses from the drop in Iberdrola's long position.| Meiko Electronics vs. Jabil Inc | Meiko Electronics vs. Ibiden CoLtd | Meiko Electronics vs. Plexus Corp | Meiko Electronics vs. KCE EL PCL |
| Iberdrola vs. KIMBALL ELECTRONICS | Iberdrola vs. United Breweries Co | Iberdrola vs. STMicroelectronics NV | Iberdrola vs. Meiko Electronics Co |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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