Correlation Between Methode Electronics and WillScot Mobile
Can any of the company-specific risk be diversified away by investing in both Methode Electronics and WillScot Mobile 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 WillScot Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Methode Electronics and WillScot Mobile Mini, you can compare the effects of market volatilities on Methode Electronics and WillScot Mobile 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 WillScot Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Methode Electronics and WillScot Mobile.
Diversification Opportunities for Methode Electronics and WillScot Mobile
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Methode and WillScot is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Methode Electronics and WillScot Mobile Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WillScot Mobile Mini 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 WillScot Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WillScot Mobile Mini has no effect on the direction of Methode Electronics i.e., Methode Electronics and WillScot Mobile go up and down completely randomly.
Pair Corralation between Methode Electronics and WillScot Mobile
Assuming the 90 days trading horizon Methode Electronics is expected to generate 1.76 times more return on investment than WillScot Mobile. However, Methode Electronics is 1.76 times more volatile than WillScot Mobile Mini. It trades about 0.05 of its potential returns per unit of risk. WillScot Mobile Mini is currently generating about 0.0 per unit of risk. If you would invest 892.00 in Methode Electronics on October 19, 2024 and sell it today you would earn a total of 238.00 from holding Methode Electronics or generate 26.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Methode Electronics vs. WillScot Mobile Mini
Performance |
| Timeline |
| Methode Electronics |
| WillScot Mobile Mini |
Methode Electronics and WillScot Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Methode Electronics and WillScot Mobile
The main advantage of trading using opposite Methode Electronics and WillScot Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Methode Electronics position performs unexpectedly, WillScot Mobile 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 WillScot Mobile will offset losses from the drop in WillScot Mobile's long position.| Methode Electronics vs. GALENA MINING LTD | Methode Electronics vs. CNVISION MEDIA | Methode Electronics vs. Western Copper and | Methode Electronics vs. Universal Entertainment |
| WillScot Mobile vs. Eidesvik Offshore ASA | WillScot Mobile vs. Altair Engineering | WillScot Mobile vs. SEALED AIR | WillScot Mobile vs. HEMISPHERE EGY |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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