Correlation Between AGRICULTBK HADR25 and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR25 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 AGRICULTBK HADR25 and Methode Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICULTBK HADR25 YC and Methode Electronics, you can compare the effects of market volatilities on AGRICULTBK HADR25 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 AGRICULTBK HADR25 with a short position of Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR25 and Methode Electronics.
Diversification Opportunities for AGRICULTBK HADR25 and Methode Electronics
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AGRICULTBK and Methode is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and AGRICULTBK HADR25 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 AGRICULTBK HADR25 YC 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 AGRICULTBK HADR25 i.e., AGRICULTBK HADR25 and Methode Electronics go up and down completely randomly.
Pair Corralation between AGRICULTBK HADR25 and Methode Electronics
Assuming the 90 days trading horizon AGRICULTBK HADR25 YC is expected to generate 0.62 times more return on investment than Methode Electronics. However, AGRICULTBK HADR25 YC is 1.62 times less risky than Methode Electronics. It trades about -0.22 of its potential returns per unit of risk. Methode Electronics is currently generating about -0.18 per unit of risk. If you would invest 1,440 in AGRICULTBK HADR25 YC on January 21, 2025 and sell it today you would lose (210.00) from holding AGRICULTBK HADR25 YC or give up 14.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICULTBK HADR25 YC vs. Methode Electronics
Performance |
| Timeline |
| AGRICULTBK HADR25 |
| Methode Electronics |
AGRICULTBK HADR25 and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICULTBK HADR25 and Methode Electronics
The main advantage of trading using opposite AGRICULTBK HADR25 and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR25 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.| AGRICULTBK HADR25 vs. INDCOMMBK CHINA ADR20 | AGRICULTBK HADR25 vs. Industrial and Commercial | AGRICULTBK HADR25 vs. CHINA BANK ADR20 | AGRICULTBK HADR25 vs. BANK OCHINA H |
| Methode Electronics vs. Hon Hai Precision | Methode Electronics vs. Mitsubishi Electric | Methode Electronics vs. Sunny Optical Technology | Methode Electronics vs. Hubbell Incorporated |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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