Correlation Between Bel Fuse and Vicor
Can any of the company-specific risk be diversified away by investing in both Bel Fuse and Vicor 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 Vicor 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 Vicor, you can compare the effects of market volatilities on Bel Fuse and Vicor 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 Vicor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bel Fuse and Vicor.
Diversification Opportunities for Bel Fuse and Vicor
Modest diversification
The 3 months correlation between Bel and Vicor is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bel Fuse A and Vicor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicor 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 Vicor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicor has no effect on the direction of Bel Fuse i.e., Bel Fuse and Vicor go up and down completely randomly.
Pair Corralation between Bel Fuse and Vicor
Assuming the 90 days horizon Bel Fuse A is expected to under-perform the Vicor. But the stock apears to be less risky and, when comparing its historical volatility, Bel Fuse A is 2.35 times less risky than Vicor. The stock trades about -0.04 of its potential returns per unit of risk. The Vicor is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,210 in Vicor on August 30, 2024 and sell it today you would earn a total of 1,334 from holding Vicor or generate 31.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Bel Fuse A vs. Vicor
Performance |
| Timeline |
| Bel Fuse A |
| Vicor |
Bel Fuse and Vicor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bel Fuse and Vicor
The main advantage of trading using opposite Bel Fuse and Vicor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bel Fuse position performs unexpectedly, Vicor 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 Vicor will offset losses from the drop in Vicor's long position.| Bel Fuse vs. Fabrinet | Bel Fuse vs. Knowles Cor | Bel Fuse vs. Ubiquiti Networks | Bel Fuse vs. AmpliTech Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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