Correlation Between Methode Electronics and China Sun
Can any of the company-specific risk be diversified away by investing in both Methode Electronics and China 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 China 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 China Sun Grp, you can compare the effects of market volatilities on Methode Electronics and China 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 China Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Methode Electronics and China Sun.
Diversification Opportunities for Methode Electronics and China Sun
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Methode and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Methode Electronics and China Sun Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Sun Grp 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 China Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Sun Grp has no effect on the direction of Methode Electronics i.e., Methode Electronics and China Sun go up and down completely randomly.
Pair Corralation between Methode Electronics and China Sun
If you would invest 916.00 in Methode Electronics on September 3, 2024 and sell it today you would earn a total of 176.00 from holding Methode Electronics or generate 19.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Methode Electronics vs. China Sun Grp
Performance |
| Timeline |
| Methode Electronics |
| China Sun Grp |
Methode Electronics and China Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Methode Electronics and China Sun
The main advantage of trading using opposite Methode Electronics and China Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Methode Electronics position performs unexpectedly, China 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 China Sun will offset losses from the drop in China Sun's long position.| Methode Electronics vs. Celestica | Methode Electronics vs. Flex | Methode Electronics vs. Jabil Circuit | Methode Electronics vs. Sanmina |
| China Sun vs. Curtis Mathes Corp | China Sun vs. alpha En | China Sun vs. Ieh Corp | China Sun vs. Methode Electronics |
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 Stocks Directory module to find actively traded stocks across global markets.
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