Correlation Between Bel Fuse and LSI Industries
Can any of the company-specific risk be diversified away by investing in both Bel Fuse and LSI Industries 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 LSI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bel Fuse B and LSI Industries, you can compare the effects of market volatilities on Bel Fuse and LSI Industries 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 LSI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bel Fuse and LSI Industries.
Diversification Opportunities for Bel Fuse and LSI Industries
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bel and LSI is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bel Fuse B and LSI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LSI Industries 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 B are associated (or correlated) with LSI Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LSI Industries has no effect on the direction of Bel Fuse i.e., Bel Fuse and LSI Industries go up and down completely randomly.
Pair Corralation between Bel Fuse and LSI Industries
Assuming the 90 days horizon Bel Fuse is expected to generate 37.49 times less return on investment than LSI Industries. But when comparing it to its historical volatility, Bel Fuse B is 3.79 times less risky than LSI Industries. It trades about 0.01 of its potential returns per unit of risk. LSI Industries is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,971 in LSI Industries on November 4, 2024 and sell it today you would earn a total of 136.00 from holding LSI Industries or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bel Fuse B vs. LSI Industries
Performance |
| Timeline |
| Bel Fuse B |
| LSI Industries |
Bel Fuse and LSI Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bel Fuse and LSI Industries
The main advantage of trading using opposite Bel Fuse and LSI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bel Fuse position performs unexpectedly, LSI Industries 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 LSI Industries will offset losses from the drop in LSI Industries' long position.| Bel Fuse vs. Benchmark Electronics | Bel Fuse vs. Methode Electronics | Bel Fuse vs. Richardson Electronics | Bel Fuse vs. Plexus Corp |
| LSI Industries vs. Plexus Corp | LSI Industries vs. OSI Systems | LSI Industries vs. CTS Corporation | LSI Industries vs. Benchmark Electronics |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |