Correlation Between Amphenol and Littelfuse
Can any of the company-specific risk be diversified away by investing in both Amphenol and Littelfuse 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 Amphenol and Littelfuse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amphenol and Littelfuse, you can compare the effects of market volatilities on Amphenol and Littelfuse 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 Amphenol with a short position of Littelfuse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amphenol and Littelfuse.
Diversification Opportunities for Amphenol and Littelfuse
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amphenol and Littelfuse is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Amphenol and Littelfuse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Littelfuse and Amphenol 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 Amphenol are associated (or correlated) with Littelfuse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Littelfuse has no effect on the direction of Amphenol i.e., Amphenol and Littelfuse go up and down completely randomly.
Pair Corralation between Amphenol and Littelfuse
Considering the 90-day investment horizon Amphenol is expected to generate 0.97 times more return on investment than Littelfuse. However, Amphenol is 1.03 times less risky than Littelfuse. It trades about 0.19 of its potential returns per unit of risk. Littelfuse is currently generating about -0.14 per unit of risk. If you would invest 6,847 in Amphenol on August 24, 2024 and sell it today you would earn a total of 477.00 from holding Amphenol or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amphenol vs. Littelfuse
Performance |
| Timeline |
| Amphenol |
| Littelfuse |
Amphenol and Littelfuse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amphenol and Littelfuse
The main advantage of trading using opposite Amphenol and Littelfuse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amphenol position performs unexpectedly, Littelfuse 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 Littelfuse will offset losses from the drop in Littelfuse's long position.The idea behind Amphenol and Littelfuse 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.| Littelfuse vs. Plexus Corp | Littelfuse vs. Celestica | Littelfuse vs. Benchmark Electronics | Littelfuse vs. Flex |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |