Correlation Between Methode Electronics and TSOGO SUN
Can any of the company-specific risk be diversified away by investing in both Methode Electronics and TSOGO SUN 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 TSOGO SUN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Methode Electronics and TSOGO SUN GAMING, you can compare the effects of market volatilities on Methode Electronics and TSOGO SUN 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 TSOGO SUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Methode Electronics and TSOGO SUN.
Diversification Opportunities for Methode Electronics and TSOGO SUN
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Methode and TSOGO is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Methode Electronics and TSOGO SUN GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSOGO SUN GAMING 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 TSOGO SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSOGO SUN GAMING has no effect on the direction of Methode Electronics i.e., Methode Electronics and TSOGO SUN go up and down completely randomly.
Pair Corralation between Methode Electronics and TSOGO SUN
Assuming the 90 days trading horizon Methode Electronics is expected to generate 1.53 times more return on investment than TSOGO SUN. However, Methode Electronics is 1.53 times more volatile than TSOGO SUN GAMING. It trades about 0.05 of its potential returns per unit of risk. TSOGO SUN GAMING is currently generating about -0.22 per unit of risk. If you would invest 1,156 in Methode Electronics on October 21, 2024 and sell it today you would earn a total of 24.00 from holding Methode Electronics or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Methode Electronics vs. TSOGO SUN GAMING
Performance |
| Timeline |
| Methode Electronics |
| TSOGO SUN GAMING |
Methode Electronics and TSOGO SUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Methode Electronics and TSOGO SUN
The main advantage of trading using opposite Methode Electronics and TSOGO SUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Methode Electronics position performs unexpectedly, TSOGO SUN 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 TSOGO SUN will offset losses from the drop in TSOGO SUN's long position.| Methode Electronics vs. Endeavour Mining PLC | Methode Electronics vs. GRENKELEASING Dusseldorf | Methode Electronics vs. CENTURIA OFFICE REIT | Methode Electronics vs. Infrastrutture Wireless Italiane |
| TSOGO SUN vs. Easy Software AG | TSOGO SUN vs. Methode Electronics | TSOGO SUN vs. GLG LIFE TECH | TSOGO SUN vs. Agilent Technologies |
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 CEOs Directory module to screen CEOs from public companies around the world.
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