Correlation Between INTERNATIONAL ENERGY and MEYER PLC

Can any of the company-specific risk be diversified away by investing in both INTERNATIONAL ENERGY and MEYER PLC 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 INTERNATIONAL ENERGY and MEYER PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between INTERNATIONAL ENERGY INSURANCE and MEYER PLC, you can compare the effects of market volatilities on INTERNATIONAL ENERGY and MEYER PLC 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 INTERNATIONAL ENERGY with a short position of MEYER PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERNATIONAL ENERGY and MEYER PLC.

Diversification Opportunities for INTERNATIONAL ENERGY and MEYER PLC

0.31

Correlation Coefficient

INTERNATIONAL ENERGY  MEYER PLC

Weak diversification

The 3 months correlation between INTERNATIONAL and MEYER is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding INTERNATIONAL ENERGY INSURANCE and MEYER PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEYER PLC and INTERNATIONAL ENERGY 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 INTERNATIONAL ENERGY INSURANCE are associated (or correlated) with MEYER PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEYER PLC has no effect on the direction of INTERNATIONAL ENERGY i.e., INTERNATIONAL ENERGY and MEYER PLC go up and down completely randomly.

Pair Corralation between INTERNATIONAL ENERGY and MEYER PLC

Assuming the 90 days trading horizon INTERNATIONAL ENERGY is expected to generate 2.17 times less return on investment than MEYER PLC. In addition to that, INTERNATIONAL ENERGY is 4.46 times more volatile than MEYER PLC. It trades about 0.01 of its total potential returns per unit of risk. MEYER PLC is currently generating about 0.12 per unit of volatility. If you would invest  843.00  in MEYER PLC on December 30, 2024 and sell it today you would earn a total of  82.00  from holding MEYER PLC or generate 9.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

INTERNATIONAL ENERGY INSURANCE  vs.  MEYER PLC

INTERNATIONAL ENERGY

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in INTERNATIONAL ENERGY INSURANCE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, INTERNATIONAL ENERGY is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

MEYER PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MEYER PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, MEYER PLC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with INTERNATIONAL ENERGY and MEYER PLC

The main advantage of trading using opposite INTERNATIONAL ENERGY and MEYER PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERNATIONAL ENERGY position performs unexpectedly, MEYER PLC 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 MEYER PLC will offset losses from the drop in MEYER PLC's long position.

The idea behind INTERNATIONAL ENERGY INSURANCE and MEYER PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.