Correlation Between Integrated Media and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both Integrated Media 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 Integrated Media and Methode Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Media Technology and Methode Electronics, you can compare the effects of market volatilities on Integrated Media 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 Integrated Media with a short position of Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Media and Methode Electronics.
Diversification Opportunities for Integrated Media and Methode Electronics
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Integrated and Methode is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Media Technology and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and Integrated Media 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 Integrated Media Technology 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 Integrated Media i.e., Integrated Media and Methode Electronics go up and down completely randomly.
Pair Corralation between Integrated Media and Methode Electronics
Given the investment horizon of 90 days Integrated Media Technology is expected to under-perform the Methode Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Integrated Media Technology is 1.05 times less risky than Methode Electronics. The stock trades about -0.04 of its potential returns per unit of risk. The Methode Electronics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 661.00 in Methode Electronics on May 2, 2025 and sell it today you would lose (3.00) from holding Methode Electronics or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Media Technology vs. Methode Electronics
Performance |
| Timeline |
| Integrated Media Tec |
| Methode Electronics |
Integrated Media and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Media and Methode Electronics
The main advantage of trading using opposite Integrated Media and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Media 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.| Integrated Media vs. Optical Cable | Integrated Media vs. KVH Industries | Integrated Media vs. Knowles Cor | Integrated Media vs. Comtech Telecommunications Corp |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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