Correlation Between Meiko Electronics and GRUPO ECOENER

Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and GRUPO ECOENER 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 Meiko Electronics and GRUPO ECOENER into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Meiko Electronics Co and GRUPO ECOENER EO, you can compare the effects of market volatilities on Meiko Electronics and GRUPO ECOENER 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 Meiko Electronics with a short position of GRUPO ECOENER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and GRUPO ECOENER.

Diversification Opportunities for Meiko Electronics and GRUPO ECOENER

0.26

Correlation Coefficient

Meiko Electronics  GRUPO ECOENER

Modest diversification

The 3 months correlation between Meiko and GRUPO is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and GRUPO ECOENER EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO ECOENER EO and Meiko Electronics 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 Meiko Electronics Co are associated (or correlated) with GRUPO ECOENER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO ECOENER EO has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and GRUPO ECOENER go up and down completely randomly.

Pair Corralation between Meiko Electronics and GRUPO ECOENER

Assuming the 90 days horizon Meiko Electronics Co is expected to under-perform the GRUPO ECOENER. In addition to that, Meiko Electronics is 1.03 times more volatile than GRUPO ECOENER EO. It trades about -0.12 of its total potential returns per unit of risk. GRUPO ECOENER EO is currently generating about 0.04 per unit of volatility. If you would invest  425.00  in GRUPO ECOENER EO on December 20, 2024 and sell it today you would earn a total of  19.00  from holding GRUPO ECOENER EO or generate 4.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Meiko Electronics Co  vs.  GRUPO ECOENER EO

Meiko Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meiko Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GRUPO ECOENER EO

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPO ECOENER EO are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GRUPO ECOENER may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Meiko Electronics and GRUPO ECOENER

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

The idea behind Meiko Electronics Co and GRUPO ECOENER EO 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.