Correlation Between Meiko Electronics and TFS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and TFS FINANCIAL 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 TFS FINANCIAL 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 TFS FINANCIAL, you can compare the effects of market volatilities on Meiko Electronics and TFS FINANCIAL 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 TFS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and TFS FINANCIAL.
Diversification Opportunities for Meiko Electronics and TFS FINANCIAL
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meiko and TFS is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS FINANCIAL 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 TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and TFS FINANCIAL go up and down completely randomly.
Pair Corralation between Meiko Electronics and TFS FINANCIAL
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.98 times more return on investment than TFS FINANCIAL. However, Meiko Electronics is 1.98 times more volatile than TFS FINANCIAL. It trades about 0.4 of its potential returns per unit of risk. TFS FINANCIAL is currently generating about 0.21 per unit of risk. If you would invest 3,620 in Meiko Electronics Co on August 31, 2024 and sell it today you would earn a total of 1,930 from holding Meiko Electronics Co or generate 53.31% 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. TFS FINANCIAL
Performance |
| Timeline |
| Meiko Electronics |
| TFS FINANCIAL |
Meiko Electronics and TFS FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and TFS FINANCIAL
The main advantage of trading using opposite Meiko Electronics and TFS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, TFS FINANCIAL 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 TFS FINANCIAL will offset losses from the drop in TFS FINANCIAL's long position.| Meiko Electronics vs. Plexus Corp | Meiko Electronics vs. Benchmark Electronics | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. NMI Holdings |
| TFS FINANCIAL vs. SIVERS SEMICONDUCTORS AB | TFS FINANCIAL vs. Darden Restaurants | TFS FINANCIAL vs. Reliance Steel Aluminum | TFS FINANCIAL vs. Q2M Managementberatung AG |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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