Correlation Between Bel Fuse and Celestica
Can any of the company-specific risk be diversified away by investing in both Bel Fuse and Celestica 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 Celestica 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 Celestica, you can compare the effects of market volatilities on Bel Fuse and Celestica 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 Celestica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bel Fuse and Celestica.
Diversification Opportunities for Bel Fuse and Celestica
Excellent diversification
The 3 months correlation between Bel and Celestica is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bel Fuse A and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica 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 Celestica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestica has no effect on the direction of Bel Fuse i.e., Bel Fuse and Celestica go up and down completely randomly.
Pair Corralation between Bel Fuse and Celestica
Assuming the 90 days horizon Bel Fuse A is expected to under-perform the Celestica. But the stock apears to be less risky and, when comparing its historical volatility, Bel Fuse A is 2.93 times less risky than Celestica. The stock trades about -0.11 of its potential returns per unit of risk. The Celestica is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 9,692 in Celestica on November 4, 2024 and sell it today you would earn a total of 2,655 from holding Celestica or generate 27.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bel Fuse A vs. Celestica
Performance |
| Timeline |
| Bel Fuse A |
| Celestica |
Bel Fuse and Celestica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bel Fuse and Celestica
The main advantage of trading using opposite Bel Fuse and Celestica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bel Fuse position performs unexpectedly, Celestica 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 Celestica will offset losses from the drop in Celestica's long position.| Bel Fuse vs. Richardson Electronics | Bel Fuse vs. LSI Industries | Bel Fuse vs. Benchmark Electronics | Bel Fuse vs. Plexus Corp |
| Celestica vs. Plexus Corp | Celestica vs. Benchmark Electronics | Celestica vs. Flex | Celestica vs. Jabil Circuit |
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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