Correlation Between SECURE ELECTRONIC and MEYER PLC

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

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

Diversification Opportunities for SECURE ELECTRONIC and MEYER PLC

0.66

Correlation Coefficient

SECURE ELECTRONIC  MEYER PLC

Poor diversification

The 3 months correlation between SECURE and MEYER is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SECURE ELECTRONIC TECHNOLOGY and MEYER PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEYER PLC and SECURE ELECTRONIC 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 SECURE ELECTRONIC TECHNOLOGY 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 SECURE ELECTRONIC i.e., SECURE ELECTRONIC and MEYER PLC go up and down completely randomly.

Pair Corralation between SECURE ELECTRONIC and MEYER PLC

Assuming the 90 days trading horizon SECURE ELECTRONIC is expected to generate 1.32 times less return on investment than MEYER PLC. In addition to that, SECURE ELECTRONIC is 3.28 times more volatile than MEYER PLC. It trades about 0.04 of its total potential returns per unit of risk. MEYER PLC is currently generating about 0.18 per unit of volatility. If you would invest  767.00  in MEYER PLC on December 2, 2024 and sell it today you would earn a total of  158.00  from holding MEYER PLC or generate 20.6% return on investment over 90 days.

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

SECURE ELECTRONIC TECHNOLOGY  vs.  MEYER PLC

SECURE ELECTRONIC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SECURE ELECTRONIC TECHNOLOGY are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, SECURE ELECTRONIC demonstrated solid returns over the last few months and may actually be approaching a breakup point.

MEYER PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MEYER PLC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, MEYER PLC showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SECURE ELECTRONIC and MEYER PLC

The main advantage of trading using opposite SECURE ELECTRONIC and MEYER PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECURE ELECTRONIC 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 SECURE ELECTRONIC TECHNOLOGY 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..