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
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meiko and Performance is 0.81. 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 2.25 times more return on investment than Performance Food. However, Meiko Electronics is 2.25 times more volatile than Performance Food Group. It trades about 0.17 of its potential returns per unit of risk. Performance Food Group is currently generating about 0.22 per unit of risk. If you would invest 2,940 in Meiko Electronics Co on November 4, 2024 and sell it today you would earn a total of 2,560 from holding Meiko Electronics Co or generate 87.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| 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. ELL ENVIRONHLDGS HD 0001 | Meiko Electronics vs. DENTSPLY SIRONA | Meiko Electronics vs. Pentair plc | Meiko Electronics vs. Altair Engineering |
| Performance Food vs. BioNTech SE | Performance Food vs. GLG LIFE TECH | Performance Food vs. SOFI TECHNOLOGIES | Performance Food vs. CHRYSALIS INVESTMENTS LTD |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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