Correlation Between Meiko Electronics and STMICROELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and STMICROELECTRONICS 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 STMICROELECTRONICS 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 STMICROELECTRONICS, you can compare the effects of market volatilities on Meiko Electronics and STMICROELECTRONICS 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 STMICROELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and STMICROELECTRONICS.
Diversification Opportunities for Meiko Electronics and STMICROELECTRONICS
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Meiko and STMICROELECTRONICS is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS 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 STMICROELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMICROELECTRONICS has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and STMICROELECTRONICS go up and down completely randomly.
Pair Corralation between Meiko Electronics and STMICROELECTRONICS
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.22 times more return on investment than STMICROELECTRONICS. However, Meiko Electronics is 1.22 times more volatile than STMICROELECTRONICS. It trades about 0.25 of its potential returns per unit of risk. STMICROELECTRONICS is currently generating about 0.06 per unit of risk. If you would invest 4,900 in Meiko Electronics Co on September 14, 2024 and sell it today you would earn a total of 600.00 from holding Meiko Electronics Co or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. STMICROELECTRONICS
Performance |
| Timeline |
| Meiko Electronics |
| STMICROELECTRONICS |
Meiko Electronics and STMICROELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and STMICROELECTRONICS
The main advantage of trading using opposite Meiko Electronics and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, STMICROELECTRONICS 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 STMICROELECTRONICS will offset losses from the drop in STMICROELECTRONICS's long position.| Meiko Electronics vs. Benchmark Electronics | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. SIVERS SEMICONDUCTORS AB | Meiko Electronics vs. Norsk Hydro ASA |
| STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |