Correlation Between KULR Technology and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both KULR Technology 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 KULR Technology and Methode Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KULR Technology Group and Methode Electronics, you can compare the effects of market volatilities on KULR Technology 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 KULR Technology with a short position of Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KULR Technology and Methode Electronics.
Diversification Opportunities for KULR Technology and Methode Electronics
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KULR and Methode is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding KULR Technology Group and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and KULR Technology 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 KULR Technology Group 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 KULR Technology i.e., KULR Technology and Methode Electronics go up and down completely randomly.
Pair Corralation between KULR Technology and Methode Electronics
Given the investment horizon of 90 days KULR Technology Group is expected to generate 2.15 times more return on investment than Methode Electronics. However, KULR Technology is 2.15 times more volatile than Methode Electronics. It trades about -0.01 of its potential returns per unit of risk. Methode Electronics is currently generating about -0.15 per unit of risk. If you would invest 228.00 in KULR Technology Group on November 18, 2024 and sell it today you would lose (15.00) from holding KULR Technology Group or give up 6.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KULR Technology Group vs. Methode Electronics
Performance |
| Timeline |
| KULR Technology Group |
| Methode Electronics |
KULR Technology and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KULR Technology and Methode Electronics
The main advantage of trading using opposite KULR Technology and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KULR Technology 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.| KULR Technology vs. Richardson Electronics | KULR Technology vs. Interlink Electronics | KULR Technology vs. SigmaTron International | KULR Technology vs. Maris Tech |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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