Correlation Between Meiko Electronics and ENN Energy
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and ENN Energy 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 ENN Energy 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 ENN Energy Holdings, you can compare the effects of market volatilities on Meiko Electronics and ENN Energy 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 ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and ENN Energy.
Diversification Opportunities for Meiko Electronics and ENN Energy
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meiko and ENN is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and ENN Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN Energy Holdings 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 ENN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN Energy Holdings has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and ENN Energy go up and down completely randomly.
Pair Corralation between Meiko Electronics and ENN Energy
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.96 times more return on investment than ENN Energy. However, Meiko Electronics is 1.96 times more volatile than ENN Energy Holdings. It trades about 0.53 of its potential returns per unit of risk. ENN Energy Holdings is currently generating about -0.03 per unit of risk. If you would invest 3,400 in Meiko Electronics Co on September 4, 2024 and sell it today you would earn a total of 2,400 from holding Meiko Electronics Co or generate 70.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Meiko Electronics Co vs. ENN Energy Holdings
Performance |
| Timeline |
| Meiko Electronics |
| ENN Energy Holdings |
Meiko Electronics and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and ENN Energy
The main advantage of trading using opposite Meiko Electronics and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, ENN Energy 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 ENN Energy will offset losses from the drop in ENN Energy'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 |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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