Correlation Between TRADEDOUBLER and METHODE ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both TRADEDOUBLER 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 TRADEDOUBLER and METHODE ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEDOUBLER AB SK and METHODE ELECTRONICS, you can compare the effects of market volatilities on TRADEDOUBLER 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 TRADEDOUBLER with a short position of METHODE ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEDOUBLER and METHODE ELECTRONICS.
Diversification Opportunities for TRADEDOUBLER and METHODE ELECTRONICS
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between TRADEDOUBLER and METHODE is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK and METHODE ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METHODE ELECTRONICS and TRADEDOUBLER 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 TRADEDOUBLER AB SK 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 TRADEDOUBLER i.e., TRADEDOUBLER and METHODE ELECTRONICS go up and down completely randomly.
Pair Corralation between TRADEDOUBLER and METHODE ELECTRONICS
Assuming the 90 days horizon TRADEDOUBLER is expected to generate 8.12 times less return on investment than METHODE ELECTRONICS. But when comparing it to its historical volatility, TRADEDOUBLER AB SK is 1.06 times less risky than METHODE ELECTRONICS. It trades about 0.02 of its potential returns per unit of risk. METHODE ELECTRONICS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 870.00 in METHODE ELECTRONICS on August 28, 2024 and sell it today you would earn a total of 130.00 from holding METHODE ELECTRONICS or generate 14.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRADEDOUBLER AB SK vs. METHODE ELECTRONICS
Performance |
| Timeline |
| TRADEDOUBLER AB SK |
| METHODE ELECTRONICS |
TRADEDOUBLER and METHODE ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEDOUBLER and METHODE ELECTRONICS
The main advantage of trading using opposite TRADEDOUBLER and METHODE ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEDOUBLER 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.| TRADEDOUBLER vs. The Interpublic Group | TRADEDOUBLER vs. Superior Plus Corp | TRADEDOUBLER vs. NMI Holdings | TRADEDOUBLER vs. Origin Agritech |
| METHODE ELECTRONICS vs. Apple Inc | METHODE ELECTRONICS vs. Apple Inc | METHODE ELECTRONICS vs. Microsoft | METHODE ELECTRONICS vs. Microsoft |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |