Correlation Between Meiko Electronics and VF

Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and VF 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 VF 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 VF Corporation, you can compare the effects of market volatilities on Meiko Electronics and VF 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 VF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and VF.

Diversification Opportunities for Meiko Electronics and VF

0.43

Correlation Coefficient

Meiko Electronics  VF

Very weak diversification

The 3 months correlation between Meiko and VF is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and VF Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VF Corporation 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 VF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VF Corporation has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and VF go up and down completely randomly.

Pair Corralation between Meiko Electronics and VF

Assuming the 90 days horizon Meiko Electronics Co is expected to generate 0.79 times more return on investment than VF. However, Meiko Electronics Co is 1.27 times less risky than VF. It trades about 0.21 of its potential returns per unit of risk. VF Corporation is currently generating about 0.08 per unit of risk. If you would invest  3,600  in Meiko Electronics Co on September 4, 2024 and sell it today you would earn a total of  2,200  from holding Meiko Electronics Co or generate 61.11% return on investment over 90 days.

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

Meiko Electronics Co  vs.  VF Corp.

Meiko Electronics

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Meiko Electronics Co are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Meiko Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

VF Corporation

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VF Corporation are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, VF reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Meiko Electronics and VF

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

The idea behind Meiko Electronics Co and VF Corporation 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 CEOs Directory module to screen CEOs from public companies around the world.