Correlation Between Hugo Boss and Meiko Electronics

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

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

Diversification Opportunities for Hugo Boss and Meiko Electronics

-0.42

Correlation Coefficient

Hugo Boss  Meiko Electronics

Very good diversification

The 3 months correlation between Hugo and Meiko is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hugo Boss AG and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics and Hugo Boss 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 Hugo Boss AG are associated (or correlated) with Meiko Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiko Electronics has no effect on the direction of Hugo Boss i.e., Hugo Boss and Meiko Electronics go up and down completely randomly.

Pair Corralation between Hugo Boss and Meiko Electronics

Assuming the 90 days trading horizon Hugo Boss AG is expected to under-perform the Meiko Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Hugo Boss AG is 1.45 times less risky than Meiko Electronics. The stock trades about -0.01 of its potential returns per unit of risk. The Meiko Electronics Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,700  in Meiko Electronics Co on September 21, 2024 and sell it today you would earn a total of  3,900  from holding Meiko Electronics Co or generate 229.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Hugo Boss AG  vs.  Meiko Electronics Co

Hugo Boss AG

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hugo Boss AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Hugo Boss exhibited solid returns over the last few months and may actually be approaching a breakup point.

Meiko Electronics

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Meiko Electronics Co are ranked lower than 14 (%) 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.

Pair Trading with Hugo Boss and Meiko Electronics

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

The idea behind Hugo Boss AG and Meiko Electronics Co 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.