Correlation Between Methode Electronics and AT S

Can any of the company-specific risk be diversified away by investing in both Methode Electronics and AT S 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 AT S into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Methode Electronics and AT S Austria, you can compare the effects of market volatilities on Methode Electronics and AT S 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 AT S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Methode Electronics and AT S.

Diversification Opportunities for Methode Electronics and AT S

0.43

Correlation Coefficient

Methode Electronics  AT S

Very weak diversification

The 3 months correlation between Methode and ASAAF is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Methode Electronics and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria 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 AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of Methode Electronics i.e., Methode Electronics and AT S go up and down completely randomly.

Pair Corralation between Methode Electronics and AT S

Considering the 90-day investment horizon Methode Electronics is expected to under-perform the AT S. In addition to that, Methode Electronics is 2.38 times more volatile than AT S Austria. It trades about -0.03 of its total potential returns per unit of risk. AT S Austria is currently generating about 0.16 per unit of volatility. If you would invest  1,253  in AT S Austria on December 3, 2024 and sell it today you would earn a total of  125.00  from holding AT S Austria or generate 9.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.56%
Values	Daily Returns

Methode Electronics  vs.  AT S Austria

Methode Electronics

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Methode Electronics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Methode Electronics is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

AT S Austria

Risk-Adjusted Performance

Very Weak

Over the last 90 days AT S Austria has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Methode Electronics and AT S

The main advantage of trading using opposite Methode Electronics and AT S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Methode Electronics position performs unexpectedly, AT S 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 AT S will offset losses from the drop in AT S's long position.

The idea behind Methode Electronics and AT S Austria pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.