Correlation Between Tsingtao Brewery and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both Tsingtao Brewery 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 Tsingtao Brewery and Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tsingtao Brewery and Meiko Electronics Co, you can compare the effects of market volatilities on Tsingtao Brewery 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 Tsingtao Brewery with a short position of Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tsingtao Brewery and Meiko Electronics.
Diversification Opportunities for Tsingtao Brewery and Meiko Electronics
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tsingtao and Meiko is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Tsingtao Brewery and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and Tsingtao Brewery 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 Tsingtao Brewery 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 Tsingtao Brewery i.e., Tsingtao Brewery and Meiko Electronics go up and down completely randomly.
Pair Corralation between Tsingtao Brewery and Meiko Electronics
Assuming the 90 days trading horizon Tsingtao Brewery is expected to under-perform the Meiko Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Tsingtao Brewery is 2.04 times less risky than Meiko Electronics. The stock trades about -0.01 of its potential returns per unit of risk. The Meiko Electronics Co is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 3,400 in Meiko Electronics Co on September 3, 2024 and sell it today you would earn a total of 2,300 from holding Meiko Electronics Co or generate 67.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tsingtao Brewery vs. Meiko Electronics Co
Performance |
| Timeline |
| Tsingtao Brewery |
| Meiko Electronics |
Tsingtao Brewery and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tsingtao Brewery and Meiko Electronics
The main advantage of trading using opposite Tsingtao Brewery and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tsingtao Brewery 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.| Tsingtao Brewery vs. Siamgas And Petrochemicals | Tsingtao Brewery vs. MELIA HOTELS | Tsingtao Brewery vs. JAPAN AIRLINES | Tsingtao Brewery vs. MIRAMAR HOTEL INV |
| Meiko Electronics vs. KCE EL PCL | Meiko Electronics vs. Benchmark Electronics | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. NMI Holdings |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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