Correlation Between Quantum and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both Quantum 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 Quantum and Methode Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantum and Methode Electronics, you can compare the effects of market volatilities on Quantum 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 Quantum with a short position of Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantum and Methode Electronics.
Diversification Opportunities for Quantum and Methode Electronics
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Quantum and Methode is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Quantum and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and Quantum 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 Quantum 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 Quantum i.e., Quantum and Methode Electronics go up and down completely randomly.
Pair Corralation between Quantum and Methode Electronics
Given the investment horizon of 90 days Quantum is expected to under-perform the Methode Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Quantum is 1.14 times less risky than Methode Electronics. The stock trades about -0.14 of its potential returns per unit of risk. The Methode Electronics is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 941.00 in Methode Electronics on May 30, 2025 and sell it today you would lose (165.00) from holding Methode Electronics or give up 17.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantum vs. Methode Electronics
Performance |
| Timeline |
| Quantum |
| Methode Electronics |
Quantum and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantum and Methode Electronics
The main advantage of trading using opposite Quantum and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantum 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.| Quantum vs. Quantum Computing | Quantum vs. Rigetti Computing | Quantum vs. D Wave Quantum | Quantum vs. Palladyne AI 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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