Correlation Between Methode Electronics and Wallbox NV
Can any of the company-specific risk be diversified away by investing in both Methode Electronics and Wallbox NV 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 Wallbox NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Methode Electronics and Wallbox NV, you can compare the effects of market volatilities on Methode Electronics and Wallbox NV 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 Wallbox NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Methode Electronics and Wallbox NV.
Diversification Opportunities for Methode Electronics and Wallbox NV
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Methode and Wallbox is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Methode Electronics and Wallbox NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallbox NV 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 Wallbox NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wallbox NV has no effect on the direction of Methode Electronics i.e., Methode Electronics and Wallbox NV go up and down completely randomly.
Pair Corralation between Methode Electronics and Wallbox NV
Considering the 90-day investment horizon Methode Electronics is expected to generate 1.08 times more return on investment than Wallbox NV. However, Methode Electronics is 1.08 times more volatile than Wallbox NV. It trades about -0.08 of its potential returns per unit of risk. Wallbox NV is currently generating about -0.36 per unit of risk. If you would invest 1,227 in Methode Electronics on November 5, 2024 and sell it today you would lose (95.00) from holding Methode Electronics or give up 7.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Methode Electronics vs. Wallbox NV
Performance |
| Timeline |
| Methode Electronics |
| Wallbox NV |
Methode Electronics and Wallbox NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Methode Electronics and Wallbox NV
The main advantage of trading using opposite Methode Electronics and Wallbox NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Methode Electronics position performs unexpectedly, Wallbox NV 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 Wallbox NV will offset losses from the drop in Wallbox NV's long position.| Methode Electronics vs. Sanmina | Methode Electronics vs. Benchmark Electronics | Methode Electronics vs. OSI Systems | Methode Electronics vs. Celestica |
| Wallbox NV vs. Kopin | Wallbox NV vs. Corning Incorporated | Wallbox NV vs. KULR Technology Group | Wallbox NV vs. Ouster, Common Stock |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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