Correlation Between Meiko Electronics and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC, you can compare the effects of market volatilities on Meiko Electronics and STORE ELECTRONIC 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 STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and STORE ELECTRONIC.
Diversification Opportunities for Meiko Electronics and STORE ELECTRONIC
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meiko and STORE is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC 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 STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between Meiko Electronics and STORE ELECTRONIC
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 0.89 times more return on investment than STORE ELECTRONIC. However, Meiko Electronics Co is 1.12 times less risky than STORE ELECTRONIC. It trades about -0.03 of its potential returns per unit of risk. STORE ELECTRONIC is currently generating about -0.04 per unit of risk. If you would invest 5,600 in Meiko Electronics Co on November 3, 2024 and sell it today you would lose (100.00) from holding Meiko Electronics Co or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. STORE ELECTRONIC
Performance |
| Timeline |
| Meiko Electronics |
| STORE ELECTRONIC |
Meiko Electronics and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and STORE ELECTRONIC
The main advantage of trading using opposite Meiko Electronics and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| Meiko Electronics vs. ecotel communication ag | Meiko Electronics vs. T Mobile | Meiko Electronics vs. Haverty Furniture Companies | Meiko Electronics vs. American Homes 4 |
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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 Valuation module to check real value of public entities based on technical and fundamental data.
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