Correlation Between Meiko Electronics and TAL Education
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and TAL Education 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 TAL Education 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 TAL Education Group, you can compare the effects of market volatilities on Meiko Electronics and TAL Education 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 TAL Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and TAL Education.
Diversification Opportunities for Meiko Electronics and TAL Education
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Meiko and TAL is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and TAL Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAL Education Group 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 TAL Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAL Education Group has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and TAL Education go up and down completely randomly.
Pair Corralation between Meiko Electronics and TAL Education
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.52 times more return on investment than TAL Education. However, Meiko Electronics is 1.52 times more volatile than TAL Education Group. It trades about 0.36 of its potential returns per unit of risk. TAL Education Group is currently generating about -0.02 per unit of risk. If you would invest 3,640 in Meiko Electronics Co on August 30, 2024 and sell it today you would earn a total of 1,810 from holding Meiko Electronics Co or generate 49.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. TAL Education Group
Performance |
| Timeline |
| Meiko Electronics |
| TAL Education Group |
Meiko Electronics and TAL Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and TAL Education
The main advantage of trading using opposite Meiko Electronics and TAL Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, TAL Education 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 TAL Education will offset losses from the drop in TAL Education's long position.| Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. NMI Holdings | Meiko Electronics vs. SIVERS SEMICONDUCTORS AB | Meiko Electronics vs. Talanx AG |
| TAL Education vs. Apple Inc | TAL Education vs. Apple Inc | TAL Education vs. Apple Inc | TAL Education vs. Apple Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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