Correlation Between THORNEY TECHS and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both THORNEY TECHS 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 THORNEY TECHS and Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THORNEY TECHS LTD and Meiko Electronics Co, you can compare the effects of market volatilities on THORNEY TECHS 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 THORNEY TECHS with a short position of Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of THORNEY TECHS and Meiko Electronics.
Diversification Opportunities for THORNEY TECHS and Meiko Electronics
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between THORNEY and Meiko is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding THORNEY TECHS LTD and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and THORNEY TECHS 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 THORNEY TECHS LTD 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 THORNEY TECHS i.e., THORNEY TECHS and Meiko Electronics go up and down completely randomly.
Pair Corralation between THORNEY TECHS and Meiko Electronics
Assuming the 90 days horizon THORNEY TECHS LTD is expected to under-perform the Meiko Electronics. In addition to that, THORNEY TECHS is 1.49 times more volatile than Meiko Electronics Co. It trades about -0.1 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THORNEY TECHS LTD vs. Meiko Electronics Co
Performance |
| Timeline |
| THORNEY TECHS LTD |
| Meiko Electronics |
THORNEY TECHS and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THORNEY TECHS and Meiko Electronics
The main advantage of trading using opposite THORNEY TECHS and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THORNEY TECHS 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.| THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc | THORNEY TECHS vs. Apple Inc |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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