Correlation Between Methode Electronics and Ionix Technology
Can any of the company-specific risk be diversified away by investing in both Methode Electronics and Ionix Technology 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 Ionix Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Methode Electronics and Ionix Technology, you can compare the effects of market volatilities on Methode Electronics and Ionix Technology 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 Ionix Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Methode Electronics and Ionix Technology.
Diversification Opportunities for Methode Electronics and Ionix Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Methode and Ionix is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Methode Electronics and Ionix Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ionix Technology 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 Ionix Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ionix Technology has no effect on the direction of Methode Electronics i.e., Methode Electronics and Ionix Technology go up and down completely randomly.
Pair Corralation between Methode Electronics and Ionix Technology
If you would invest 1,085 in Methode Electronics on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Methode Electronics or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 68.8% |
| Values | Daily Returns |
Methode Electronics vs. Ionix Technology
Performance |
| Timeline |
| Methode Electronics |
| Ionix Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Methode Electronics and Ionix Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Methode Electronics and Ionix Technology
The main advantage of trading using opposite Methode Electronics and Ionix Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Methode Electronics position performs unexpectedly, Ionix Technology 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 Ionix Technology will offset losses from the drop in Ionix Technology's long position.| Methode Electronics vs. Celestica | Methode Electronics vs. Flex | Methode Electronics vs. Jabil Circuit | Methode Electronics vs. Sanmina |
| Ionix Technology vs. Ostin Technology Group | Ionix Technology vs. SigmaTron International | Ionix Technology vs. MicroCloud Hologram | Ionix Technology vs. Maris Tech |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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