Correlation Between SPDR Gold and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both SPDR Gold 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 SPDR Gold and Methode Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Gold Mini and Methode Electronics, you can compare the effects of market volatilities on SPDR Gold 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 SPDR Gold with a short position of Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and Methode Electronics.
Diversification Opportunities for SPDR Gold and Methode Electronics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPDR and Methode is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Mini and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and SPDR Gold 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 SPDR Gold Mini 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 SPDR Gold i.e., SPDR Gold and Methode Electronics go up and down completely randomly.
Pair Corralation between SPDR Gold and Methode Electronics
Given the investment horizon of 90 days SPDR Gold is expected to generate 34.45 times less return on investment than Methode Electronics. But when comparing it to its historical volatility, SPDR Gold Mini is 3.33 times less risky than Methode Electronics. It trades about 0.01 of its potential returns per unit of risk. Methode Electronics is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 550.00 in Methode Electronics on April 16, 2025 and sell it today you would earn a total of 122.00 from holding Methode Electronics or generate 22.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Gold Mini vs. Methode Electronics
Performance |
| Timeline |
| SPDR Gold Mini |
| Methode Electronics |
SPDR Gold and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and Methode Electronics
The main advantage of trading using opposite SPDR Gold and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold 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.| SPDR Gold vs. MicroSectors Gold 3X | SPDR Gold vs. Franklin Responsibly Sourced | SPDR Gold vs. GraniteShares Gold Trust | SPDR Gold vs. DB Gold Double |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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