Correlation Between Bel Fuse and TE Connectivity
Can any of the company-specific risk be diversified away by investing in both Bel Fuse and TE Connectivity 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 TE Connectivity 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 TE Connectivity, you can compare the effects of market volatilities on Bel Fuse and TE Connectivity 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 TE Connectivity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bel Fuse and TE Connectivity.
Diversification Opportunities for Bel Fuse and TE Connectivity
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bel and TEL is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bel Fuse A and TE Connectivity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TE Connectivity 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 TE Connectivity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TE Connectivity has no effect on the direction of Bel Fuse i.e., Bel Fuse and TE Connectivity go up and down completely randomly.
Pair Corralation between Bel Fuse and TE Connectivity
Assuming the 90 days horizon Bel Fuse A is expected to under-perform the TE Connectivity. In addition to that, Bel Fuse is 1.33 times more volatile than TE Connectivity. It trades about -0.13 of its total potential returns per unit of risk. TE Connectivity is currently generating about -0.01 per unit of volatility. If you would invest 15,198 in TE Connectivity on August 30, 2024 and sell it today you would lose (83.00) from holding TE Connectivity or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bel Fuse A vs. TE Connectivity
Performance |
| Timeline |
| Bel Fuse A |
| TE Connectivity |
Bel Fuse and TE Connectivity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bel Fuse and TE Connectivity
The main advantage of trading using opposite Bel Fuse and TE Connectivity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bel Fuse position performs unexpectedly, TE Connectivity 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 TE Connectivity will offset losses from the drop in TE Connectivity's long position.| Bel Fuse vs. Fabrinet | Bel Fuse vs. Knowles Cor | Bel Fuse vs. Ubiquiti Networks | Bel Fuse vs. AmpliTech Group |
| TE Connectivity vs. Littelfuse | TE Connectivity vs. Fabrinet | TE Connectivity vs. Jabil Circuit | TE Connectivity vs. Sanmina |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |