Correlation Between STEEL DYNAMICS and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both STEEL DYNAMICS 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 STEEL DYNAMICS and Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STEEL DYNAMICS and Meiko Electronics Co, you can compare the effects of market volatilities on STEEL DYNAMICS 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 STEEL DYNAMICS with a short position of Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of STEEL DYNAMICS and Meiko Electronics.
Diversification Opportunities for STEEL DYNAMICS and Meiko Electronics
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between STEEL and Meiko is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding STEEL DYNAMICS and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and STEEL DYNAMICS 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 STEEL DYNAMICS 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 STEEL DYNAMICS i.e., STEEL DYNAMICS and Meiko Electronics go up and down completely randomly.
Pair Corralation between STEEL DYNAMICS and Meiko Electronics
Assuming the 90 days trading horizon STEEL DYNAMICS is expected to generate 0.99 times more return on investment than Meiko Electronics. However, STEEL DYNAMICS is 1.01 times less risky than Meiko Electronics. It trades about -0.06 of its potential returns per unit of risk. Meiko Electronics Co is currently generating about -0.17 per unit of risk. If you would invest 11,488 in STEEL DYNAMICS on October 16, 2024 and sell it today you would lose (190.00) from holding STEEL DYNAMICS or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STEEL DYNAMICS vs. Meiko Electronics Co
Performance |
| Timeline |
| STEEL DYNAMICS |
| Meiko Electronics |
STEEL DYNAMICS and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STEEL DYNAMICS and Meiko Electronics
The main advantage of trading using opposite STEEL DYNAMICS and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STEEL DYNAMICS 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.| STEEL DYNAMICS vs. China Communications Services | STEEL DYNAMICS vs. ePlay Digital | STEEL DYNAMICS vs. COLUMBIA SPORTSWEAR | STEEL DYNAMICS vs. ARISTOCRAT LEISURE |
| Meiko Electronics vs. CARSALESCOM | Meiko Electronics vs. STEEL DYNAMICS | Meiko Electronics vs. Lamar Advertising | Meiko Electronics vs. Sch Environnement SA |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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