Correlation Between Alps Electric and Bel Fuse
Can any of the company-specific risk be diversified away by investing in both Alps Electric and Bel Fuse 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 Alps Electric and Bel Fuse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alps Electric Co and Bel Fuse A, you can compare the effects of market volatilities on Alps Electric and Bel Fuse 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 Alps Electric with a short position of Bel Fuse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alps Electric and Bel Fuse.
Diversification Opportunities for Alps Electric and Bel Fuse
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alps and Bel is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Alps Electric Co and Bel Fuse A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bel Fuse A and Alps Electric 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 Alps Electric Co are associated (or correlated) with Bel Fuse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bel Fuse A has no effect on the direction of Alps Electric i.e., Alps Electric and Bel Fuse go up and down completely randomly.
Pair Corralation between Alps Electric and Bel Fuse
Assuming the 90 days horizon Alps Electric is expected to generate 7.78 times less return on investment than Bel Fuse. But when comparing it to its historical volatility, Alps Electric Co is 1.19 times less risky than Bel Fuse. It trades about 0.01 of its potential returns per unit of risk. Bel Fuse A is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,081 in Bel Fuse A on November 4, 2024 and sell it today you would earn a total of 4,180 from holding Bel Fuse A or generate 102.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Alps Electric Co vs. Bel Fuse A
Performance |
| Timeline |
| Alps Electric |
| Bel Fuse A |
Alps Electric and Bel Fuse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alps Electric and Bel Fuse
The main advantage of trading using opposite Alps Electric and Bel Fuse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alps Electric position performs unexpectedly, Bel Fuse 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 Bel Fuse will offset losses from the drop in Bel Fuse's long position.| Alps Electric vs. alpha En | Alps Electric vs. Bitmine Immersion Technologies | Alps Electric vs. American Aires | Alps Electric vs. AT S Austria |
| Bel Fuse vs. Richardson Electronics | Bel Fuse vs. LSI Industries | Bel Fuse vs. Benchmark Electronics | Bel Fuse vs. Plexus Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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