Correlation Between Meiko Electronics and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Singapore Reinsurance 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 Singapore Reinsurance 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 Singapore Reinsurance, you can compare the effects of market volatilities on Meiko Electronics and Singapore Reinsurance 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 Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Singapore Reinsurance.
Diversification Opportunities for Meiko Electronics and Singapore Reinsurance
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Meiko and Singapore is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance 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 Singapore Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Reinsurance has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between Meiko Electronics and Singapore Reinsurance
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.61 times more return on investment than Singapore Reinsurance. However, Meiko Electronics is 1.61 times more volatile than Singapore Reinsurance. It trades about 0.18 of its potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.15 per unit of risk. If you would invest 3,840 in Meiko Electronics Co on September 28, 2024 and sell it today you would earn a total of 1,710 from holding Meiko Electronics Co or generate 44.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Meiko Electronics Co vs. Singapore Reinsurance
Performance |
Timeline |
Meiko Electronics |
Singapore Reinsurance |
Meiko Electronics and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meiko Electronics and Singapore Reinsurance
The main advantage of trading using opposite Meiko Electronics and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Singapore Reinsurance 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 Singapore Reinsurance will offset losses from the drop in Singapore Reinsurance's long position.Meiko Electronics vs. DISTRICT METALS | Meiko Electronics vs. LION ONE METALS | Meiko Electronics vs. GRIFFIN MINING LTD | Meiko Electronics vs. ADRIATIC METALS LS 013355 |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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