Correlation Between GRENKELEASING and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both GRENKELEASING 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 GRENKELEASING and Methode Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRENKELEASING Dusseldorf and Methode Electronics, you can compare the effects of market volatilities on GRENKELEASING 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 GRENKELEASING with a short position of Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRENKELEASING and Methode Electronics.
Diversification Opportunities for GRENKELEASING and Methode Electronics
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GRENKELEASING and Methode is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GRENKELEASING Dusseldorf and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and GRENKELEASING 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 GRENKELEASING Dusseldorf 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 GRENKELEASING i.e., GRENKELEASING and Methode Electronics go up and down completely randomly.
Pair Corralation between GRENKELEASING and Methode Electronics
Assuming the 90 days trading horizon GRENKELEASING Dusseldorf is expected to generate 0.63 times more return on investment than Methode Electronics. However, GRENKELEASING Dusseldorf is 1.58 times less risky than Methode Electronics. It trades about 0.31 of its potential returns per unit of risk. Methode Electronics is currently generating about 0.05 per unit of risk. If you would invest 1,512 in GRENKELEASING Dusseldorf on October 21, 2024 and sell it today you would earn a total of 162.00 from holding GRENKELEASING Dusseldorf or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRENKELEASING Dusseldorf vs. Methode Electronics
Performance |
| Timeline |
| GRENKELEASING Duss |
| Methode Electronics |
GRENKELEASING and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRENKELEASING and Methode Electronics
The main advantage of trading using opposite GRENKELEASING and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRENKELEASING 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.| GRENKELEASING vs. Gol Intelligent Airlines | GRENKELEASING vs. Merit Medical Systems | GRENKELEASING vs. Advanced Medical Solutions | GRENKELEASING vs. PEPTONIC MEDICAL |
| Methode Electronics vs. Endeavour Mining PLC | Methode Electronics vs. GRENKELEASING Dusseldorf | Methode Electronics vs. CENTURIA OFFICE REIT | Methode Electronics vs. Infrastrutture Wireless Italiane |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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