Correlation Between GOLDGROUP MINING and Methode Electronics

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

By analyzing existing cross correlation between GOLDGROUP MINING INC and Methode Electronics, you can compare the effects of market volatilities on GOLDGROUP MINING 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 GOLDGROUP MINING with a short position of Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDGROUP MINING and Methode Electronics.

Diversification Opportunities for GOLDGROUP MINING and Methode Electronics

-0.38

Correlation Coefficient

GOLDGROUP MINING  Methode Electronics

Very good diversification

The 3 months correlation between GOLDGROUP and Methode is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GOLDGROUP MINING INC and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and GOLDGROUP MINING 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 GOLDGROUP MINING INC 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 GOLDGROUP MINING i.e., GOLDGROUP MINING and Methode Electronics go up and down completely randomly.

Pair Corralation between GOLDGROUP MINING and Methode Electronics

Assuming the 90 days trading horizon GOLDGROUP MINING is expected to generate 5.81 times less return on investment than Methode Electronics. But when comparing it to its historical volatility, GOLDGROUP MINING INC is 1.07 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 0.06 of returns per unit of risk over similar time horizon. If you would invest  515.00  in Methode Electronics on April 24, 2025 and sell it today you would earn a total of  50.00  from holding Methode Electronics or generate 9.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GOLDGROUP MINING INC  vs.  Methode Electronics

GOLDGROUP MINING INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days GOLDGROUP MINING INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, GOLDGROUP MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Methode Electronics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Methode Electronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Methode Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GOLDGROUP MINING and Methode Electronics

The main advantage of trading using opposite GOLDGROUP MINING and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDGROUP MINING 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 GOLDGROUP MINING INC 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.