Correlation Between Bel Fuse and Interlink Electronics
Can any of the company-specific risk be diversified away by investing in both Bel Fuse and Interlink Electronics 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 Interlink Electronics 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 Interlink Electronics, you can compare the effects of market volatilities on Bel Fuse and Interlink Electronics 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 Interlink Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bel Fuse and Interlink Electronics.
Diversification Opportunities for Bel Fuse and Interlink Electronics
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bel and Interlink is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bel Fuse A and Interlink Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Electronics 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 Interlink Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interlink Electronics has no effect on the direction of Bel Fuse i.e., Bel Fuse and Interlink Electronics go up and down completely randomly.
Pair Corralation between Bel Fuse and Interlink Electronics
Assuming the 90 days horizon Bel Fuse A is expected to under-perform the Interlink Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Bel Fuse A is 4.41 times less risky than Interlink Electronics. The stock trades about -0.17 of its potential returns per unit of risk. The Interlink Electronics is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 337.00 in Interlink Electronics on August 24, 2024 and sell it today you would earn a total of 119.99 from holding Interlink Electronics or generate 35.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bel Fuse A vs. Interlink Electronics
Performance |
| Timeline |
| Bel Fuse A |
| Interlink Electronics |
Bel Fuse and Interlink Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bel Fuse and Interlink Electronics
The main advantage of trading using opposite Bel Fuse and Interlink Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bel Fuse position performs unexpectedly, Interlink Electronics 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 Interlink Electronics will offset losses from the drop in Interlink Electronics' long position.| Bel Fuse vs. Richardson Electronics | Bel Fuse vs. LSI Industries | Bel Fuse vs. Benchmark Electronics | Bel Fuse vs. Plexus Corp |
| Interlink Electronics vs. Methode Electronics | Interlink Electronics vs. Bel Fuse A | Interlink Electronics vs. CTS Corporation | Interlink Electronics vs. MicroCloud Hologram |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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