Correlation Between Methode Electronics and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Methode Electronics and Samsung 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 Methode Electronics and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Methode Electronics and Samsung Electronics Co, you can compare the effects of market volatilities on Methode Electronics and Samsung 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 Methode Electronics with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Methode Electronics and Samsung Electronics.
Diversification Opportunities for Methode Electronics and Samsung Electronics
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Methode and Samsung is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Methode Electronics and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Methode Electronics i.e., Methode Electronics and Samsung Electronics go up and down completely randomly.
Pair Corralation between Methode Electronics and Samsung Electronics
Assuming the 90 days trading horizon Methode Electronics is expected to generate 2.37 times more return on investment than Samsung Electronics. However, Methode Electronics is 2.37 times more volatile than Samsung Electronics Co. It trades about -0.02 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.06 per unit of risk. If you would invest 1,951 in Methode Electronics on September 12, 2024 and sell it today you would lose (761.00) from holding Methode Electronics or give up 39.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Methode Electronics vs. Samsung Electronics Co
Performance |
| Timeline |
| Methode Electronics |
| Samsung Electronics |
Methode Electronics and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Methode Electronics and Samsung Electronics
The main advantage of trading using opposite Methode Electronics and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Methode Electronics position performs unexpectedly, Samsung 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Methode Electronics vs. Sunny Optical Technology | Methode Electronics vs. Hubbell Incorporated | Methode Electronics vs. TDK Corporation | Methode Electronics vs. Superior Plus Corp |
| Samsung Electronics vs. Methode Electronics | Samsung Electronics vs. Charter Communications | Samsung Electronics vs. Meiko Electronics Co | Samsung Electronics 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |