Correlation Between Methode Electronics and KULR Technology
Can any of the company-specific risk be diversified away by investing in both Methode Electronics and KULR 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 KULR 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 KULR Technology Group, you can compare the effects of market volatilities on Methode Electronics and KULR 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 KULR Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Methode Electronics and KULR Technology.
Diversification Opportunities for Methode Electronics and KULR Technology
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Methode and KULR is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Methode Electronics and KULR Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KULR Technology Group 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 KULR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KULR Technology Group has no effect on the direction of Methode Electronics i.e., Methode Electronics and KULR Technology go up and down completely randomly.
Pair Corralation between Methode Electronics and KULR Technology
Considering the 90-day investment horizon Methode Electronics is expected to under-perform the KULR Technology. But the stock apears to be less risky and, when comparing its historical volatility, Methode Electronics is 2.06 times less risky than KULR Technology. The stock trades about -0.05 of its potential returns per unit of risk. The KULR Technology Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 35.00 in KULR Technology Group on August 24, 2024 and sell it today you would earn a total of 9.00 from holding KULR Technology Group or generate 25.71% 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. KULR Technology Group
Performance |
| Timeline |
| Methode Electronics |
| KULR Technology Group |
Methode Electronics and KULR Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Methode Electronics and KULR Technology
The main advantage of trading using opposite Methode Electronics and KULR Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Methode Electronics position performs unexpectedly, KULR 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 KULR Technology will offset losses from the drop in KULR Technology's long position.| Methode Electronics vs. Sanmina | Methode Electronics vs. Benchmark Electronics | Methode Electronics vs. OSI Systems | Methode Electronics vs. Celestica |
| KULR Technology vs. Richardson Electronics | KULR Technology vs. Interlink Electronics | KULR Technology vs. SigmaTron International | KULR 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |