Correlation Between United Natural and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both United Natural 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 United Natural and Meiko Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Natural Foods and Meiko Electronics Co, you can compare the effects of market volatilities on United Natural 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 United Natural with a short position of Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Meiko Electronics.
Diversification Opportunities for United Natural and Meiko Electronics
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Meiko is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and United Natural 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 United Natural Foods 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 United Natural i.e., United Natural and Meiko Electronics go up and down completely randomly.
Pair Corralation between United Natural and Meiko Electronics
Assuming the 90 days horizon United Natural Foods is expected to under-perform the Meiko Electronics. In addition to that, United Natural is 1.29 times more volatile than Meiko Electronics Co. It trades about 0.0 of its total potential returns per unit of risk. Meiko Electronics Co is currently generating about 0.08 per unit of volatility. If you would invest 2,040 in Meiko Electronics Co on October 29, 2024 and sell it today you would earn a total of 3,410 from holding Meiko Electronics Co or generate 167.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Meiko Electronics Co
Performance |
| Timeline |
| United Natural Foods |
| Meiko Electronics |
United Natural and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Meiko Electronics
The main advantage of trading using opposite United Natural and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural 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.| United Natural vs. Nippon Light Metal | United Natural vs. Yuexiu Transport Infrastructure | United Natural vs. AEON METALS LTD | United Natural vs. Jacquet Metal Service |
| Meiko Electronics vs. GRENKELEASING Dusseldorf | Meiko Electronics vs. Playtech plc | Meiko Electronics vs. ARISTOCRAT LEISURE | Meiko Electronics vs. PLAYMATES TOYS |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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