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

0.0

Correlation Coefficient

Via Optronics  Methode Electronics

Pay attention - limited upside

The 3 months correlation between Via and Methode is 0.0. 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

If you would invest (100.00) in Via Optronics Ag on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Via Optronics Ag or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Via Optronics Ag  vs.  Methode Electronics

Via Optronics Ag

Risk-Adjusted Performance

Very Weak

Over the last 90 days Via Optronics Ag has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Via Optronics is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Methode Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Methode Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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.

The idea behind Via Optronics Ag and Methode Electronics 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.