Correlation Between Belden and ADC Therapeutics
Can any of the company-specific risk be diversified away by investing in both Belden and ADC Therapeutics 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 Belden and ADC Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Belden Inc and ADC Therapeutics SA, you can compare the effects of market volatilities on Belden and ADC Therapeutics 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 Belden with a short position of ADC Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belden and ADC Therapeutics.
Diversification Opportunities for Belden and ADC Therapeutics
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Belden and ADC is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Belden Inc and ADC Therapeutics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADC Therapeutics and Belden 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 Belden Inc are associated (or correlated) with ADC Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADC Therapeutics has no effect on the direction of Belden i.e., Belden and ADC Therapeutics go up and down completely randomly.
Pair Corralation between Belden and ADC Therapeutics
Considering the 90-day investment horizon Belden Inc is expected to generate 0.63 times more return on investment than ADC Therapeutics. However, Belden Inc is 1.58 times less risky than ADC Therapeutics. It trades about 0.09 of its potential returns per unit of risk. ADC Therapeutics SA is currently generating about -0.35 per unit of risk. If you would invest 11,754 in Belden Inc on August 25, 2024 and sell it today you would earn a total of 598.00 from holding Belden Inc or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Belden Inc vs. ADC Therapeutics SA
Performance |
| Timeline |
| Belden Inc |
| ADC Therapeutics |
Belden and ADC Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Belden and ADC Therapeutics
The main advantage of trading using opposite Belden and ADC Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belden position performs unexpectedly, ADC Therapeutics 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 ADC Therapeutics will offset losses from the drop in ADC Therapeutics' long position.| Belden vs. Clearfield | Belden vs. Comtech Telecommunications Corp | Belden vs. Knowles Cor | Belden vs. Extreme Networks |
| ADC Therapeutics vs. Passage Bio | ADC Therapeutics vs. Black Diamond Therapeutics | ADC Therapeutics vs. Alector | ADC Therapeutics vs. Century Therapeutics |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |