Correlation Between Jumbo SA and METHODE ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Jumbo SA 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 Jumbo SA and METHODE ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jumbo SA and METHODE ELECTRONICS, you can compare the effects of market volatilities on Jumbo SA 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 Jumbo SA with a short position of METHODE ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jumbo SA and METHODE ELECTRONICS.
Diversification Opportunities for Jumbo SA and METHODE ELECTRONICS
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jumbo and METHODE is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jumbo SA and METHODE ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METHODE ELECTRONICS and Jumbo SA 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 Jumbo SA 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 Jumbo SA i.e., Jumbo SA and METHODE ELECTRONICS go up and down completely randomly.
Pair Corralation between Jumbo SA and METHODE ELECTRONICS
Assuming the 90 days horizon Jumbo SA is expected to generate 12.99 times less return on investment than METHODE ELECTRONICS. But when comparing it to its historical volatility, Jumbo SA is 2.38 times less risky than METHODE ELECTRONICS. It trades about 0.01 of its potential returns per unit of risk. METHODE ELECTRONICS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 941.00 in METHODE ELECTRONICS on September 3, 2024 and sell it today you would earn a total of 99.00 from holding METHODE ELECTRONICS or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jumbo SA vs. METHODE ELECTRONICS
Performance |
| Timeline |
| Jumbo SA |
| METHODE ELECTRONICS |
Jumbo SA and METHODE ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jumbo SA and METHODE ELECTRONICS
The main advantage of trading using opposite Jumbo SA and METHODE ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jumbo SA 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's long position.| Jumbo SA vs. METHODE ELECTRONICS | Jumbo SA vs. Electronic Arts | Jumbo SA vs. VARIOUS EATERIES LS | Jumbo SA vs. Solstad Offshore ASA |
| METHODE ELECTRONICS vs. TOTAL GABON | METHODE ELECTRONICS vs. Walgreens Boots Alliance | METHODE ELECTRONICS vs. Peak Resources Limited |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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