Correlation Between Mesa Laboratories and Bonso Electronics
Can any of the company-specific risk be diversified away by investing in both Mesa Laboratories and Bonso 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 Mesa Laboratories and Bonso Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mesa Laboratories and Bonso Electronics International, you can compare the effects of market volatilities on Mesa Laboratories and Bonso 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 Mesa Laboratories with a short position of Bonso Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Laboratories and Bonso Electronics.
Diversification Opportunities for Mesa Laboratories and Bonso Electronics
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mesa and Bonso is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Laboratories and Bonso Electronics Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonso Electronics and Mesa Laboratories 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 Mesa Laboratories are associated (or correlated) with Bonso Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonso Electronics has no effect on the direction of Mesa Laboratories i.e., Mesa Laboratories and Bonso Electronics go up and down completely randomly.
Pair Corralation between Mesa Laboratories and Bonso Electronics
Given the investment horizon of 90 days Mesa Laboratories is expected to generate 55.29 times less return on investment than Bonso Electronics. But when comparing it to its historical volatility, Mesa Laboratories is 6.42 times less risky than Bonso Electronics. It trades about 0.01 of its potential returns per unit of risk. Bonso Electronics International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 303.00 in Bonso Electronics International on September 1, 2024 and sell it today you would lose (44.00) from holding Bonso Electronics International or give up 14.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 8.06% |
| Values | Daily Returns |
Mesa Laboratories vs. Bonso Electronics Internationa
Performance |
| Timeline |
| Mesa Laboratories |
| Bonso Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mesa Laboratories and Bonso Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Laboratories and Bonso Electronics
The main advantage of trading using opposite Mesa Laboratories and Bonso Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Laboratories position performs unexpectedly, Bonso 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 Bonso Electronics will offset losses from the drop in Bonso Electronics' long position.| Mesa Laboratories vs. Novanta | Mesa Laboratories vs. Itron Inc | Mesa Laboratories vs. Fortive Corp | Mesa Laboratories vs. Vishay Precision Group |
| Bonso Electronics vs. Cepton Inc | Bonso Electronics vs. SaverOne 2014 Ltd | Bonso Electronics vs. Genasys | Bonso Electronics vs. Kraken Robotics |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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