Correlation Between Meiko Electronics and Samsung Electronics

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Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Meiko Electronics and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Samsung Electronics.

Diversification Opportunities for Meiko Electronics and Samsung Electronics

-0.47
  Correlation Coefficient

Very good diversification

The 3 months correlation between Meiko and Samsung is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Samsung Electronics go up and down completely randomly.

Pair Corralation between Meiko Electronics and Samsung Electronics

Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.72 times more return on investment than Samsung Electronics. However, Meiko Electronics is 1.72 times more volatile than Samsung Electronics Co. It trades about 0.08 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.0 per unit of risk. If you would invest  2,080  in Meiko Electronics Co on August 27, 2024 and sell it today you would earn a total of  3,370  from holding Meiko Electronics Co or generate 162.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Meiko Electronics Co  vs.  Samsung Electronics Co

 Performance 
       Timeline  
Meiko Electronics 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Meiko Electronics Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Meiko Electronics reported solid returns over the last few months and may actually be approaching a breakup point.
Samsung Electronics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Samsung Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Meiko Electronics and Samsung Electronics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Meiko Electronics and Samsung Electronics

The main advantage of trading using opposite Meiko Electronics and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.
The idea behind Meiko Electronics Co and Samsung Electronics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 CEOs Directory module to screen CEOs from public companies around the world.

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