Correlation Between Via Optronics and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both Via Optronics 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 Via Optronics and Methode Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Via Optronics Ag and Methode Electronics, you can compare the effects of market volatilities on Via Optronics 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 Via Optronics with a short position of Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Optronics and Methode Electronics.
Diversification Opportunities for Via Optronics and Methode Electronics
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Via and Methode is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Via Optronics Ag and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and Via Optronics 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 Via Optronics Ag 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 Via Optronics i.e., Via Optronics and Methode Electronics go up and down completely randomly.
Pair Corralation between Via Optronics and Methode Electronics
Given the investment horizon of 90 days Via Optronics Ag is expected to generate 4.47 times more return on investment than Methode Electronics. However, Via Optronics is 4.47 times more volatile than Methode Electronics. It trades about 0.03 of its potential returns per unit of risk. Methode Electronics is currently generating about -0.06 per unit of risk. If you would invest 172.00 in Via Optronics Ag on August 24, 2024 and sell it today you would lose (157.00) from holding Via Optronics Ag or give up 91.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.03% |
| Values | Daily Returns |
Via Optronics Ag vs. Methode Electronics
Performance |
| Timeline |
| Via Optronics Ag |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Methode Electronics |
Via Optronics and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Via Optronics and Methode Electronics
The main advantage of trading using opposite Via Optronics and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Optronics 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' long position.| Via Optronics vs. Benchmark Electronics | Via Optronics vs. Bel Fuse A | Via Optronics vs. Methode Electronics | Via Optronics vs. Bel Fuse B |
| Methode Electronics vs. Sanmina | Methode Electronics vs. Benchmark Electronics | Methode Electronics vs. OSI Systems | Methode Electronics vs. Celestica |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |