Correlation Between Methode Electronics and ZINC MEDIA
Can any of the company-specific risk be diversified away by investing in both Methode Electronics and ZINC MEDIA 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 ZINC MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Methode Electronics and ZINC MEDIA GR, you can compare the effects of market volatilities on Methode Electronics and ZINC MEDIA 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 ZINC MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Methode Electronics and ZINC MEDIA.
Diversification Opportunities for Methode Electronics and ZINC MEDIA
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Methode and ZINC is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Methode Electronics and ZINC MEDIA GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINC MEDIA GR 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 ZINC MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINC MEDIA GR has no effect on the direction of Methode Electronics i.e., Methode Electronics and ZINC MEDIA go up and down completely randomly.
Pair Corralation between Methode Electronics and ZINC MEDIA
Assuming the 90 days trading horizon Methode Electronics is expected to generate 1.15 times less return on investment than ZINC MEDIA. In addition to that, Methode Electronics is 1.39 times more volatile than ZINC MEDIA GR. It trades about 0.16 of its total potential returns per unit of risk. ZINC MEDIA GR is currently generating about 0.25 per unit of volatility. If you would invest 56.00 in ZINC MEDIA GR on October 28, 2024 and sell it today you would earn a total of 7.00 from holding ZINC MEDIA GR or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Methode Electronics vs. ZINC MEDIA GR
Performance |
| Timeline |
| Methode Electronics |
| ZINC MEDIA GR |
Methode Electronics and ZINC MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Methode Electronics and ZINC MEDIA
The main advantage of trading using opposite Methode Electronics and ZINC MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Methode Electronics position performs unexpectedly, ZINC MEDIA 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 ZINC MEDIA will offset losses from the drop in ZINC MEDIA's long position.| Methode Electronics vs. Yuexiu Transport Infrastructure | Methode Electronics vs. SIERRA METALS | Methode Electronics vs. OURGAME INTHOLDL 00005 | Methode Electronics vs. GAMING FAC SA |
| ZINC MEDIA vs. Zoom Video Communications | ZINC MEDIA vs. Luckin Coffee | ZINC MEDIA vs. Chesapeake Utilities | ZINC MEDIA vs. Algonquin Power Utilities |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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