Correlation Between Meiko Electronics and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Playa Hotels 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 Playa Hotels 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 Playa Hotels Resorts, you can compare the effects of market volatilities on Meiko Electronics and Playa Hotels 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 Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Playa Hotels.
Diversification Opportunities for Meiko Electronics and Playa Hotels
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meiko and Playa is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts 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 Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Playa Hotels go up and down completely randomly.
Pair Corralation between Meiko Electronics and Playa Hotels
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.64 times more return on investment than Playa Hotels. However, Meiko Electronics is 1.64 times more volatile than Playa Hotels Resorts. It trades about 0.18 of its potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.26 per unit of risk. If you would invest 4,060 in Meiko Electronics Co on August 28, 2024 and sell it today you would earn a total of 1,390 from holding Meiko Electronics Co or generate 34.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. Playa Hotels Resorts
Performance |
| Timeline |
| Meiko Electronics |
| Playa Hotels Resorts |
Meiko Electronics and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and Playa Hotels
The main advantage of trading using opposite Meiko Electronics and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Playa Hotels 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. NMI Holdings | Meiko Electronics vs. Origin Agritech | Meiko Electronics vs. SIVERS SEMICONDUCTORS AB |
| Playa Hotels vs. Superior Plus Corp | Playa Hotels vs. NMI Holdings | Playa Hotels vs. Origin Agritech | Playa Hotels vs. SIVERS SEMICONDUCTORS AB |
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
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |