Correlation Between TOTAL GABON and METHODE ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both TOTAL GABON and METHODE ELECTRONICS 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 TOTAL GABON and METHODE ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOTAL GABON and METHODE ELECTRONICS, you can compare the effects of market volatilities on TOTAL GABON and METHODE ELECTRONICS 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 TOTAL GABON with a short position of METHODE ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL GABON and METHODE ELECTRONICS.
Diversification Opportunities for TOTAL GABON and METHODE ELECTRONICS
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TOTAL and METHODE is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL GABON and METHODE ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METHODE ELECTRONICS and TOTAL GABON 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 TOTAL GABON are associated (or correlated) with METHODE ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METHODE ELECTRONICS has no effect on the direction of TOTAL GABON i.e., TOTAL GABON and METHODE ELECTRONICS go up and down completely randomly.
Pair Corralation between TOTAL GABON and METHODE ELECTRONICS
Assuming the 90 days trading horizon TOTAL GABON is expected to generate 0.39 times more return on investment than METHODE ELECTRONICS. However, TOTAL GABON is 2.58 times less risky than METHODE ELECTRONICS. It trades about 0.08 of its potential returns per unit of risk. METHODE ELECTRONICS is currently generating about 0.02 per unit of risk. If you would invest 14,828 in TOTAL GABON on September 3, 2024 and sell it today you would earn a total of 3,572 from holding TOTAL GABON or generate 24.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOTAL GABON vs. METHODE ELECTRONICS
Performance |
| Timeline |
| TOTAL GABON |
| METHODE ELECTRONICS |
TOTAL GABON and METHODE ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOTAL GABON and METHODE ELECTRONICS
The main advantage of trading using opposite TOTAL GABON and METHODE ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOTAL GABON position performs unexpectedly, METHODE ELECTRONICS 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 METHODE ELECTRONICS will offset losses from the drop in METHODE ELECTRONICS's long position.| TOTAL GABON vs. TOTAL BANGUN PERSAD | TOTAL GABON vs. TOTAL BANGUN PERSAD | TOTAL GABON vs. TOTAL ENERGY SERVS | TOTAL GABON vs. Anheuser Busch InBev SANV |
| METHODE ELECTRONICS vs. TOTAL GABON | METHODE ELECTRONICS vs. Walgreens Boots Alliance | METHODE ELECTRONICS vs. Peak Resources Limited |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |