Correlation Between BizLink Holding and Merry Electronics
Can any of the company-specific risk be diversified away by investing in both BizLink Holding and Merry 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 BizLink Holding and Merry Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BizLink Holding and Merry Electronics Co, you can compare the effects of market volatilities on BizLink Holding and Merry 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 BizLink Holding with a short position of Merry Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BizLink Holding and Merry Electronics.
Diversification Opportunities for BizLink Holding and Merry Electronics
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BizLink and Merry is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding BizLink Holding and Merry Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merry Electronics and BizLink Holding 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 BizLink Holding are associated (or correlated) with Merry Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merry Electronics has no effect on the direction of BizLink Holding i.e., BizLink Holding and Merry Electronics go up and down completely randomly.
Pair Corralation between BizLink Holding and Merry Electronics
Assuming the 90 days trading horizon BizLink Holding is expected to under-perform the Merry Electronics. In addition to that, BizLink Holding is 1.9 times more volatile than Merry Electronics Co. It trades about -0.09 of its total potential returns per unit of risk. Merry Electronics Co is currently generating about 0.07 per unit of volatility. If you would invest 10,800 in Merry Electronics Co on December 4, 2024 and sell it today you would earn a total of 750.00 from holding Merry Electronics Co or generate 6.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BizLink Holding vs. Merry Electronics Co
Performance |
Timeline |
BizLink Holding |
Merry Electronics |
BizLink Holding and Merry Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BizLink Holding and Merry Electronics
The main advantage of trading using opposite BizLink Holding and Merry Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BizLink Holding position performs unexpectedly, Merry 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 Merry Electronics will offset losses from the drop in Merry Electronics' long position.BizLink Holding vs. Hota Industrial Mfg | BizLink Holding vs. Chroma ATE | BizLink Holding vs. Sinbon Electronics Co | BizLink Holding vs. Tong Hsing Electronic |
Merry Electronics vs. ESUN Financial Holding | Merry Electronics vs. Standard Foods Corp | Merry Electronics vs. Chinese Maritime Transport | Merry Electronics vs. Hunya Foods Co |
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.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |