Correlation Between CNVISION MEDIA and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both CNVISION MEDIA 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 CNVISION MEDIA and Methode Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNVISION MEDIA and Methode Electronics, you can compare the effects of market volatilities on CNVISION MEDIA 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 CNVISION MEDIA with a short position of Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and Methode Electronics.
Diversification Opportunities for CNVISION MEDIA and Methode Electronics
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CNVISION and Methode is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and CNVISION MEDIA 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 CNVISION MEDIA 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 CNVISION MEDIA i.e., CNVISION MEDIA and Methode Electronics go up and down completely randomly.
Pair Corralation between CNVISION MEDIA and Methode Electronics
Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 0.78 times more return on investment than Methode Electronics. However, CNVISION MEDIA is 1.28 times less risky than Methode Electronics. It trades about 0.21 of its potential returns per unit of risk. Methode Electronics is currently generating about -0.1 per unit of risk. If you would invest 5.55 in CNVISION MEDIA on October 19, 2024 and sell it today you would earn a total of 0.50 from holding CNVISION MEDIA or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
CNVISION MEDIA vs. Methode Electronics
Performance |
| Timeline |
| CNVISION MEDIA |
| Methode Electronics |
CNVISION MEDIA and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNVISION MEDIA and Methode Electronics
The main advantage of trading using opposite CNVISION MEDIA and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNVISION MEDIA 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.| CNVISION MEDIA vs. GRIFFIN MINING LTD | CNVISION MEDIA vs. Gol Intelligent Airlines | CNVISION MEDIA vs. Nok Airlines PCL | CNVISION MEDIA vs. Perseus Mining Limited |
| Methode Electronics vs. GALENA MINING LTD | Methode Electronics vs. CNVISION MEDIA | Methode Electronics vs. Western Copper and | Methode Electronics vs. Universal Entertainment |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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