Correlation Between EMagin and Methode Electronics

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

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

Diversification Opportunities for EMagin and Methode Electronics

0.0

Correlation Coefficient

EMagin  Methode Electronics

Pay attention - limited upside

The 3 months correlation between EMagin and Methode is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EMagin and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and EMagin 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 EMagin 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 EMagin i.e., EMagin and Methode Electronics go up and down completely randomly.

Pair Corralation between EMagin and Methode Electronics

If you would invest  653.00  in Methode Electronics on May 4, 2025 and sell it today you would lose (20.00) from holding Methode Electronics or give up 3.06% of portfolio value over 90 days.

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

EMagin  vs.  Methode Electronics

EMagin

Risk-Adjusted Performance

Very Weak

Over the last 90 days EMagin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, EMagin 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

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Methode Electronics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Methode Electronics is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with EMagin and Methode Electronics

The main advantage of trading using opposite EMagin and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMagin 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 EMagin 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.