Correlation Between Meiko Electronics and Performance Food
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Performance Food 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 Performance Food 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 Performance Food Group, you can compare the effects of market volatilities on Meiko Electronics and Performance Food 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 Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Performance Food.
Diversification Opportunities for Meiko Electronics and Performance Food
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meiko and Performance is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food 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 Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Performance Food go up and down completely randomly.
Pair Corralation between Meiko Electronics and Performance Food
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 2.02 times more return on investment than Performance Food. However, Meiko Electronics is 2.02 times more volatile than Performance Food Group. It trades about 0.09 of its potential returns per unit of risk. Performance Food Group is currently generating about 0.06 per unit of risk. If you would invest 1,630 in Meiko Electronics Co on September 19, 2024 and sell it today you would earn a total of 4,020 from holding Meiko Electronics Co or generate 246.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Meiko Electronics Co vs. Performance Food Group
Performance |
| Timeline |
| Meiko Electronics |
| Performance Food |
Meiko Electronics and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and Performance Food
The main advantage of trading using opposite Meiko Electronics and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Performance Food 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 Performance Food will offset losses from the drop in Performance Food's long position.| Meiko Electronics vs. Benchmark Electronics | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. SIVERS SEMICONDUCTORS AB | Meiko Electronics vs. Norsk Hydro ASA |
| Performance Food vs. AGF Management Limited | Performance Food vs. Meiko Electronics Co | Performance Food vs. Sims Metal Management | Performance Food vs. Corporate Travel Management |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |