Correlation Between GLADSTONE LAND and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both GLADSTONE LAND and Methode 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 GLADSTONE LAND and Methode Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLADSTONE LAND L 001 and Methode Electronics, you can compare the effects of market volatilities on GLADSTONE LAND and Methode 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 GLADSTONE LAND with a short position of Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLADSTONE LAND and Methode Electronics.
Diversification Opportunities for GLADSTONE LAND and Methode Electronics
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GLADSTONE and Methode is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding GLADSTONE LAND L 001 and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and GLADSTONE LAND 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 GLADSTONE LAND L 001 are associated (or correlated) with Methode Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Methode Electronics has no effect on the direction of GLADSTONE LAND i.e., GLADSTONE LAND and Methode Electronics go up and down completely randomly.
Pair Corralation between GLADSTONE LAND and Methode Electronics
Assuming the 90 days horizon GLADSTONE LAND L 001 is expected to generate 0.42 times more return on investment than Methode Electronics. However, GLADSTONE LAND L 001 is 2.39 times less risky than Methode Electronics. It trades about -0.04 of its potential returns per unit of risk. Methode Electronics is currently generating about -0.04 per unit of risk. If you would invest 1,643 in GLADSTONE LAND L 001 on September 12, 2024 and sell it today you would lose (574.00) from holding GLADSTONE LAND L 001 or give up 34.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GLADSTONE LAND L 001 vs. Methode Electronics
Performance |
| Timeline |
| GLADSTONE LAND L |
| Methode Electronics |
GLADSTONE LAND and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLADSTONE LAND and Methode Electronics
The main advantage of trading using opposite GLADSTONE LAND and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLADSTONE LAND position performs unexpectedly, Methode 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 Methode Electronics will offset losses from the drop in Methode Electronics' long position.| GLADSTONE LAND vs. Methode Electronics | GLADSTONE LAND vs. AOI Electronics Co | GLADSTONE LAND vs. Align Technology | GLADSTONE LAND vs. Electronic Arts |
| Methode Electronics vs. Sunny Optical Technology | Methode Electronics vs. Hubbell Incorporated | Methode Electronics vs. TDK Corporation | Methode Electronics vs. Superior Plus Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |