Correlation Between Belden and Stagwell
Can any of the company-specific risk be diversified away by investing in both Belden and Stagwell 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 Stagwell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Belden Inc and Stagwell, you can compare the effects of market volatilities on Belden and Stagwell 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 Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belden and Stagwell.
Diversification Opportunities for Belden and Stagwell
Average diversification
The 3 months correlation between Belden and Stagwell is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Belden Inc and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Belden i.e., Belden and Stagwell go up and down completely randomly.
Pair Corralation between Belden and Stagwell
Considering the 90-day investment horizon Belden is expected to generate 3.75 times less return on investment than Stagwell. In addition to that, Belden is 1.06 times more volatile than Stagwell. It trades about 0.1 of its total potential returns per unit of risk. Stagwell is currently generating about 0.4 per unit of volatility. If you would invest 627.00 in Stagwell on August 27, 2024 and sell it today you would earn a total of 155.00 from holding Stagwell or generate 24.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Belden Inc vs. Stagwell
Performance |
| Timeline |
| Belden Inc |
| Stagwell |
Belden and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Belden and Stagwell
The main advantage of trading using opposite Belden and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belden position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell's long position.The idea behind Belden Inc and Stagwell 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.| Stagwell vs. ADTRAN Inc | Stagwell vs. Belden Inc | Stagwell vs. ADC Therapeutics SA | Stagwell vs. Comtech Telecommunications 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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