Correlation Between Regions Financial and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Meiko 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 Regions Financial and Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Meiko Electronics Co, you can compare the effects of market volatilities on Regions Financial and Meiko 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 Regions Financial with a short position of Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Meiko Electronics.
Diversification Opportunities for Regions Financial and Meiko Electronics
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Regions and Meiko is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and Regions Financial 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 Regions Financial are associated (or correlated) with Meiko Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiko Electronics has no effect on the direction of Regions Financial i.e., Regions Financial and Meiko Electronics go up and down completely randomly.
Pair Corralation between Regions Financial and Meiko Electronics
Assuming the 90 days horizon Regions Financial is expected to generate 0.47 times more return on investment than Meiko Electronics. However, Regions Financial is 2.11 times less risky than Meiko Electronics. It trades about 0.19 of its potential returns per unit of risk. Meiko Electronics Co is currently generating about 0.09 per unit of risk. If you would invest 1,709 in Regions Financial on September 2, 2024 and sell it today you would earn a total of 891.00 from holding Regions Financial or generate 52.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. Meiko Electronics Co
Performance |
| Timeline |
| Regions Financial |
| Meiko Electronics |
Regions Financial and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Meiko Electronics
The main advantage of trading using opposite Regions Financial and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Meiko 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 Meiko Electronics will offset losses from the drop in Meiko Electronics' long position.| Regions Financial vs. DELTA AIR LINES | Regions Financial vs. SAFETY MEDICAL PROD | Regions Financial vs. Pentair plc | Regions Financial vs. Alaska Air Group |
| Meiko Electronics vs. GRIFFIN MINING LTD | Meiko Electronics vs. Jacquet Metal Service | Meiko Electronics vs. Federal Agricultural Mortgage | Meiko Electronics vs. Harmony Gold Mining |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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