Correlation Between Methode Electronics and AMAG Austria
Can any of the company-specific risk be diversified away by investing in both Methode Electronics and AMAG Austria 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 Methode Electronics and AMAG Austria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Methode Electronics and AMAG Austria Metall, you can compare the effects of market volatilities on Methode Electronics and AMAG Austria 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 Methode Electronics with a short position of AMAG Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Methode Electronics and AMAG Austria.
Diversification Opportunities for Methode Electronics and AMAG Austria
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Methode and AMAG is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Methode Electronics and AMAG Austria Metall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG Austria Metall and Methode Electronics 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 Methode Electronics are associated (or correlated) with AMAG Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG Austria Metall has no effect on the direction of Methode Electronics i.e., Methode Electronics and AMAG Austria go up and down completely randomly.
Pair Corralation between Methode Electronics and AMAG Austria
Assuming the 90 days trading horizon Methode Electronics is expected to under-perform the AMAG Austria. In addition to that, Methode Electronics is 2.57 times more volatile than AMAG Austria Metall. It trades about -0.2 of its total potential returns per unit of risk. AMAG Austria Metall is currently generating about 0.01 per unit of volatility. If you would invest 2,410 in AMAG Austria Metall on October 13, 2024 and sell it today you would earn a total of 0.00 from holding AMAG Austria Metall or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Methode Electronics vs. AMAG Austria Metall
Performance |
| Timeline |
| Methode Electronics |
| AMAG Austria Metall |
Methode Electronics and AMAG Austria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Methode Electronics and AMAG Austria
The main advantage of trading using opposite Methode Electronics and AMAG Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Methode Electronics position performs unexpectedly, AMAG Austria 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 AMAG Austria will offset losses from the drop in AMAG Austria's long position.| Methode Electronics vs. Molina Healthcare | Methode Electronics vs. US Physical Therapy | Methode Electronics vs. X FAB Silicon Foundries | Methode Electronics vs. TRI CHEMICAL LABORATINC |
| AMAG Austria vs. Pembina Pipeline Corp | AMAG Austria vs. Methode Electronics | AMAG Austria vs. Major Drilling Group | AMAG Austria vs. Electronic Arts |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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