Correlation Between Methode Electronics and Kering SA
Can any of the company-specific risk be diversified away by investing in both Methode Electronics and Kering SA 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 Kering SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Methode Electronics and Kering SA, you can compare the effects of market volatilities on Methode Electronics and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Methode Electronics and Kering SA.
Diversification Opportunities for Methode Electronics and Kering SA
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Methode and Kering is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Methode Electronics and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Methode Electronics i.e., Methode Electronics and Kering SA go up and down completely randomly.
Pair Corralation between Methode Electronics and Kering SA
If you would invest 940.00 in Methode Electronics on September 13, 2024 and sell it today you would earn a total of 290.00 from holding Methode Electronics or generate 30.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Methode Electronics vs. Kering SA
Performance |
| Timeline |
| Methode Electronics |
| Kering SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Methode Electronics and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Methode Electronics and Kering SA
The main advantage of trading using opposite Methode Electronics and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Methode Electronics position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| Methode Electronics vs. Sunny Optical Technology | Methode Electronics vs. Hubbell Incorporated | Methode Electronics vs. TDK Corporation | Methode Electronics vs. Superior Plus Corp |
| Kering SA vs. BOSTON BEER A | Kering SA vs. Fevertree Drinks PLC | Kering SA vs. QBE Insurance Group | Kering SA vs. JSC Halyk bank |
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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