Correlation Between Meiko Electronics and STHREE PLC
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and STHREE PLC 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 STHREE PLC 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 STHREE PLC LS, you can compare the effects of market volatilities on Meiko Electronics and STHREE PLC 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 STHREE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and STHREE PLC.
Diversification Opportunities for Meiko Electronics and STHREE PLC
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meiko and STHREE is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and STHREE PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STHREE PLC LS 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 STHREE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STHREE PLC LS has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and STHREE PLC go up and down completely randomly.
Pair Corralation between Meiko Electronics and STHREE PLC
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 2.99 times more return on investment than STHREE PLC. However, Meiko Electronics is 2.99 times more volatile than STHREE PLC LS. It trades about 0.21 of its potential returns per unit of risk. STHREE PLC LS is currently generating about -0.08 per unit of risk. If you would invest 3,840 in Meiko Electronics Co on August 30, 2024 and sell it today you would earn a total of 1,610 from holding Meiko Electronics Co or generate 41.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Meiko Electronics Co vs. STHREE PLC LS
Performance |
| Timeline |
| Meiko Electronics |
| STHREE PLC LS |
Meiko Electronics and STHREE PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and STHREE PLC
The main advantage of trading using opposite Meiko Electronics and STHREE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, STHREE PLC 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 STHREE PLC will offset losses from the drop in STHREE PLC's long position.| Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. NMI Holdings | Meiko Electronics vs. SIVERS SEMICONDUCTORS AB | Meiko Electronics vs. Talanx AG |
| STHREE PLC vs. Recruit Holdings Co | STHREE PLC vs. Randstad NV | STHREE PLC vs. TRINET GROUP INC | STHREE PLC vs. TONGDAO LIEPGR DL 0001 |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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