Correlation Between Meiko Electronics and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and UNITED RENTALS 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 UNITED RENTALS 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 UNITED RENTALS, you can compare the effects of market volatilities on Meiko Electronics and UNITED RENTALS 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 UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and UNITED RENTALS.
Diversification Opportunities for Meiko Electronics and UNITED RENTALS
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Meiko and UNITED is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS 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 UNITED RENTALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED RENTALS has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and UNITED RENTALS go up and down completely randomly.
Pair Corralation between Meiko Electronics and UNITED RENTALS
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.36 times more return on investment than UNITED RENTALS. However, Meiko Electronics is 1.36 times more volatile than UNITED RENTALS. It trades about 0.08 of its potential returns per unit of risk. UNITED RENTALS is currently generating about 0.07 per unit of risk. If you would invest 1,950 in Meiko Electronics Co on October 13, 2024 and sell it today you would earn a total of 3,300 from holding Meiko Electronics Co or generate 169.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. UNITED RENTALS
Performance |
| Timeline |
| Meiko Electronics |
| UNITED RENTALS |
Meiko Electronics and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and UNITED RENTALS
The main advantage of trading using opposite Meiko Electronics and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, UNITED RENTALS 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 UNITED RENTALS will offset losses from the drop in UNITED RENTALS's long position.| Meiko Electronics vs. Laureate Education | Meiko Electronics vs. CLEAN ENERGY FUELS | Meiko Electronics vs. G8 EDUCATION | Meiko Electronics vs. EMBARK EDUCATION LTD |
| UNITED RENTALS vs. Keck Seng Investments | UNITED RENTALS vs. Chuangs China Investments | UNITED RENTALS vs. Meiko Electronics Co | UNITED RENTALS vs. Global Ship Lease |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stocks Directory Find actively traded stocks across global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |