Correlation Between Bel Fuse and Alps Electric
Can any of the company-specific risk be diversified away by investing in both Bel Fuse and Alps Electric 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 Bel Fuse and Alps Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bel Fuse A and Alps Electric Co, you can compare the effects of market volatilities on Bel Fuse and Alps Electric 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 Bel Fuse with a short position of Alps Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bel Fuse and Alps Electric.
Diversification Opportunities for Bel Fuse and Alps Electric
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bel and Alps is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bel Fuse A and Alps Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alps Electric and Bel Fuse 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 Bel Fuse A are associated (or correlated) with Alps Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alps Electric has no effect on the direction of Bel Fuse i.e., Bel Fuse and Alps Electric go up and down completely randomly.
Pair Corralation between Bel Fuse and Alps Electric
Assuming the 90 days horizon Bel Fuse A is expected to under-perform the Alps Electric. In addition to that, Bel Fuse is 1.21 times more volatile than Alps Electric Co. It trades about -0.11 of its total potential returns per unit of risk. Alps Electric Co is currently generating about 0.03 per unit of volatility. If you would invest 2,030 in Alps Electric Co on November 4, 2024 and sell it today you would earn a total of 17.00 from holding Alps Electric Co or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bel Fuse A vs. Alps Electric Co
Performance |
| Timeline |
| Bel Fuse A |
| Alps Electric |
Bel Fuse and Alps Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bel Fuse and Alps Electric
The main advantage of trading using opposite Bel Fuse and Alps Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bel Fuse position performs unexpectedly, Alps Electric 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 Alps Electric will offset losses from the drop in Alps Electric's long position.| Bel Fuse vs. Richardson Electronics | Bel Fuse vs. LSI Industries | Bel Fuse vs. Benchmark Electronics | Bel Fuse vs. Plexus Corp |
| Alps Electric vs. alpha En | Alps Electric vs. Bitmine Immersion Technologies | Alps Electric vs. American Aires | Alps Electric vs. AT S Austria |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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