Correlation Between Schweizer Electronic and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both Schweizer Electronic 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 Schweizer Electronic and Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schweizer Electronic AG and Meiko Electronics Co, you can compare the effects of market volatilities on Schweizer Electronic 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 Schweizer Electronic with a short position of Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizer Electronic and Meiko Electronics.
Diversification Opportunities for Schweizer Electronic and Meiko Electronics
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Schweizer and Meiko is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Schweizer Electronic AG and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and Schweizer Electronic 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 Schweizer Electronic AG 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 Schweizer Electronic i.e., Schweizer Electronic and Meiko Electronics go up and down completely randomly.
Pair Corralation between Schweizer Electronic and Meiko Electronics
Assuming the 90 days horizon Schweizer Electronic AG is expected to under-perform the Meiko Electronics. In addition to that, Schweizer Electronic is 2.39 times more volatile than Meiko Electronics Co. It trades about -0.16 of its total potential returns per unit of risk. Meiko Electronics Co is currently generating about 0.25 per unit of volatility. If you would invest 4,900 in Meiko Electronics Co on September 14, 2024 and sell it today you would earn a total of 600.00 from holding Meiko Electronics Co or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schweizer Electronic AG vs. Meiko Electronics Co
Performance |
| Timeline |
| Schweizer Electronic |
| Meiko Electronics |
Schweizer Electronic and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweizer Electronic and Meiko Electronics
The main advantage of trading using opposite Schweizer Electronic and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizer Electronic 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.| Schweizer Electronic vs. Benchmark Electronics | Schweizer Electronic vs. Superior Plus Corp | Schweizer Electronic vs. SIVERS SEMICONDUCTORS AB | Schweizer Electronic vs. Norsk Hydro ASA |
| Meiko Electronics vs. Benchmark Electronics | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. SIVERS SEMICONDUCTORS AB | Meiko Electronics vs. Norsk Hydro ASA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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