Correlation Between Meiko Electronics and DOLFINES
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and DOLFINES 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 DOLFINES 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 DOLFINES SA EO, you can compare the effects of market volatilities on Meiko Electronics and DOLFINES 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 DOLFINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and DOLFINES.
Diversification Opportunities for Meiko Electronics and DOLFINES
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meiko and DOLFINES is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and DOLFINES SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOLFINES SA EO 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 DOLFINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOLFINES SA EO has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and DOLFINES go up and down completely randomly.
Pair Corralation between Meiko Electronics and DOLFINES
Assuming the 90 days horizon Meiko Electronics is expected to generate 11.66 times less return on investment than DOLFINES. But when comparing it to its historical volatility, Meiko Electronics Co is 15.46 times less risky than DOLFINES. It trades about 0.22 of its potential returns per unit of risk. DOLFINES SA EO is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 50.00 in DOLFINES SA EO on October 17, 2024 and sell it today you would earn a total of 123.00 from holding DOLFINES SA EO or generate 246.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.53% |
| Values | Daily Returns |
Meiko Electronics Co vs. DOLFINES SA EO
Performance |
| Timeline |
| Meiko Electronics |
| DOLFINES SA EO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Meiko Electronics and DOLFINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and DOLFINES
The main advantage of trading using opposite Meiko Electronics and DOLFINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, DOLFINES 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 DOLFINES will offset losses from the drop in DOLFINES's long position.| Meiko Electronics vs. PARKEN Sport Entertainment | Meiko Electronics vs. ADRIATIC METALS LS 013355 | Meiko Electronics vs. SPORT LISBOA E | Meiko Electronics vs. Gaztransport Technigaz SA |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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