Correlation Between Belden and Cambium Networks
Can any of the company-specific risk be diversified away by investing in both Belden and Cambium Networks 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 Cambium Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Belden Inc and Cambium Networks Corp, you can compare the effects of market volatilities on Belden and Cambium Networks 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 Cambium Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belden and Cambium Networks.
Diversification Opportunities for Belden and Cambium Networks
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Belden and Cambium is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Belden Inc and Cambium Networks Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambium Networks Corp 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 Cambium Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambium Networks Corp has no effect on the direction of Belden i.e., Belden and Cambium Networks go up and down completely randomly.
Pair Corralation between Belden and Cambium Networks
Considering the 90-day investment horizon Belden Inc is expected to generate 0.57 times more return on investment than Cambium Networks. However, Belden Inc is 1.74 times less risky than Cambium Networks. It trades about 0.07 of its potential returns per unit of risk. Cambium Networks Corp is currently generating about 0.03 per unit of risk. If you would invest 11,657 in Belden Inc on August 24, 2024 and sell it today you would earn a total of 407.00 from holding Belden Inc or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Belden Inc vs. Cambium Networks Corp
Performance |
| Timeline |
| Belden Inc |
| Cambium Networks Corp |
Belden and Cambium Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Belden and Cambium Networks
The main advantage of trading using opposite Belden and Cambium Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belden position performs unexpectedly, Cambium Networks 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 Cambium Networks will offset losses from the drop in Cambium Networks' long position.| Belden vs. Clearfield | Belden vs. Comtech Telecommunications Corp | Belden vs. Knowles Cor | Belden vs. Extreme Networks |
| Cambium Networks vs. Aviat Networks | Cambium Networks vs. Rimini Street | Cambium Networks vs. Airgain | Cambium Networks vs. Calix Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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