Correlation Between Meiko Electronics and LG Electronics
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and LG Electronics 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 LG Electronics 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 LG Electronics, you can compare the effects of market volatilities on Meiko Electronics and LG Electronics 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 LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and LG Electronics.
Diversification Opportunities for Meiko Electronics and LG Electronics
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Meiko and LGLG is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics 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 LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and LG Electronics go up and down completely randomly.
Pair Corralation between Meiko Electronics and LG Electronics
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.44 times more return on investment than LG Electronics. However, Meiko Electronics is 1.44 times more volatile than LG Electronics. It trades about 0.09 of its potential returns per unit of risk. LG Electronics is currently generating about 0.0 per unit of risk. If you would invest 1,700 in Meiko Electronics Co on September 23, 2024 and sell it today you would earn a total of 3,850 from holding Meiko Electronics Co or generate 226.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. LG Electronics
Performance |
| Timeline |
| Meiko Electronics |
| LG Electronics |
Meiko Electronics and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and LG Electronics
The main advantage of trading using opposite Meiko Electronics and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, LG Electronics 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 LG Electronics will offset losses from the drop in LG Electronics' long position.| Meiko Electronics vs. Transportadora de Gas | Meiko Electronics vs. Fidelity National Information | Meiko Electronics vs. Jacquet Metal Service | Meiko Electronics vs. Datang International Power |
| LG Electronics vs. Iridium Communications | LG Electronics vs. TEXAS ROADHOUSE | LG Electronics vs. Broadcom | LG Electronics vs. INTERSHOP Communications Aktiengesellschaft |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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