Correlation Between Meiko Electronics and MARKET VECTR
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and MARKET VECTR 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 MARKET VECTR 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 MARKET VECTR RETAIL, you can compare the effects of market volatilities on Meiko Electronics and MARKET VECTR 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 MARKET VECTR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and MARKET VECTR.
Diversification Opportunities for Meiko Electronics and MARKET VECTR
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meiko and MARKET is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and MARKET VECTR RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARKET VECTR RETAIL 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 MARKET VECTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARKET VECTR RETAIL has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and MARKET VECTR go up and down completely randomly.
Pair Corralation between Meiko Electronics and MARKET VECTR
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 4.58 times more return on investment than MARKET VECTR. However, Meiko Electronics is 4.58 times more volatile than MARKET VECTR RETAIL. It trades about 0.52 of its potential returns per unit of risk. MARKET VECTR RETAIL is currently generating about 0.41 per unit of risk. If you would invest 3,400 in Meiko Electronics Co on September 3, 2024 and sell it today you would earn a total of 2,300 from holding Meiko Electronics Co or generate 67.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. MARKET VECTR RETAIL
Performance |
| Timeline |
| Meiko Electronics |
| MARKET VECTR RETAIL |
Meiko Electronics and MARKET VECTR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and MARKET VECTR
The main advantage of trading using opposite Meiko Electronics and MARKET VECTR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, MARKET VECTR 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 MARKET VECTR will offset losses from the drop in MARKET VECTR's long position.| Meiko Electronics vs. KCE EL PCL | Meiko Electronics vs. Benchmark Electronics | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. NMI Holdings |
| MARKET VECTR vs. TOTAL GABON | MARKET VECTR vs. Walgreens Boots Alliance | MARKET VECTR vs. Peak Resources Limited |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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