Correlation Between Meiko Electronics and Herman Miller
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Herman Miller 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 Herman Miller 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 Herman Miller, you can compare the effects of market volatilities on Meiko Electronics and Herman Miller 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 Herman Miller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Herman Miller.
Diversification Opportunities for Meiko Electronics and Herman Miller
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Meiko and Herman is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Herman Miller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herman Miller 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 Herman Miller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herman Miller has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Herman Miller go up and down completely randomly.
Pair Corralation between Meiko Electronics and Herman Miller
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.29 times more return on investment than Herman Miller. However, Meiko Electronics is 1.29 times more volatile than Herman Miller. It trades about 0.12 of its potential returns per unit of risk. Herman Miller is currently generating about 0.07 per unit of risk. If you would invest 1,680 in Meiko Electronics Co on September 4, 2024 and sell it today you would earn a total of 4,120 from holding Meiko Electronics Co or generate 245.24% 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. Herman Miller
Performance |
| Timeline |
| Meiko Electronics |
| Herman Miller |
Meiko Electronics and Herman Miller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and Herman Miller
The main advantage of trading using opposite Meiko Electronics and Herman Miller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Herman Miller 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 Herman Miller will offset losses from the drop in Herman Miller's long position.| Meiko Electronics vs. KCE EL PCL | Meiko Electronics vs. Benchmark Electronics | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. NMI Holdings |
| Herman Miller vs. Cal Maine Foods | Herman Miller vs. LION ONE METALS | Herman Miller vs. FIREWEED METALS P | Herman Miller vs. TYSON FOODS A |
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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