Correlation Between Transportadora and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both Transportadora 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 Transportadora and Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and Meiko Electronics Co, you can compare the effects of market volatilities on Transportadora 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 Transportadora with a short position of Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Meiko Electronics.
Diversification Opportunities for Transportadora and Meiko Electronics
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Transportadora and Meiko is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and Transportadora 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 Transportadora de Gas 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 Transportadora i.e., Transportadora and Meiko Electronics go up and down completely randomly.
Pair Corralation between Transportadora and Meiko Electronics
Assuming the 90 days trading horizon Transportadora is expected to generate 1.17 times less return on investment than Meiko Electronics. In addition to that, Transportadora is 1.07 times more volatile than Meiko Electronics Co. It trades about 0.31 of its total potential returns per unit of risk. Meiko Electronics Co is currently generating about 0.38 per unit of volatility. If you would invest 3,660 in Meiko Electronics Co on September 1, 2024 and sell it today you would earn a total of 1,890 from holding Meiko Electronics Co or generate 51.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. Meiko Electronics Co
Performance |
| Timeline |
| Transportadora de Gas |
| Meiko Electronics |
Transportadora and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Meiko Electronics
The main advantage of trading using opposite Transportadora and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora 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.| Transportadora vs. AIR PRODCHEMICALS | Transportadora vs. Bumrungrad Hospital Public | Transportadora vs. National Health Investors | Transportadora vs. Cardinal Health |
| Meiko Electronics vs. Astral Foods Limited | Meiko Electronics vs. Choice Hotels International | Meiko Electronics vs. MELIA HOTELS | Meiko Electronics vs. HYATT HOTELS A |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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