Correlation Between Meiko Electronics and Sanmina
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and Sanmina 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 Sanmina 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 Sanmina, you can compare the effects of market volatilities on Meiko Electronics and Sanmina 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 Sanmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and Sanmina.
Diversification Opportunities for Meiko Electronics and Sanmina
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meiko and Sanmina is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and Sanmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanmina 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 Sanmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanmina has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and Sanmina go up and down completely randomly.
Pair Corralation between Meiko Electronics and Sanmina
Assuming the 90 days horizon Meiko Electronics Co is expected to under-perform the Sanmina. In addition to that, Meiko Electronics is 1.2 times more volatile than Sanmina. It trades about -0.28 of its total potential returns per unit of risk. Sanmina is currently generating about -0.26 per unit of volatility. If you would invest 8,370 in Sanmina on December 6, 2024 and sell it today you would lose (1,120) from holding Sanmina or give up 13.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Meiko Electronics Co vs. Sanmina
Performance |
Timeline |
Meiko Electronics |
Sanmina |
Meiko Electronics and Sanmina Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meiko Electronics and Sanmina
The main advantage of trading using opposite Meiko Electronics and Sanmina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, Sanmina 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 Sanmina will offset losses from the drop in Sanmina's long position.Meiko Electronics vs. Jacquet Metal Service | Meiko Electronics vs. Stag Industrial | Meiko Electronics vs. China Datang | Meiko Electronics vs. DOCDATA |
Sanmina vs. USU Software AG | Sanmina vs. Kingdee International Software | Sanmina vs. Magic Software Enterprises | Sanmina vs. VULCAN MATERIALS |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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