Correlation Between Data IO and Bel Fuse
Can any of the company-specific risk be diversified away by investing in both Data IO and Bel Fuse 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 Data IO and Bel Fuse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Data IO and Bel Fuse B, you can compare the effects of market volatilities on Data IO and Bel Fuse 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 Data IO with a short position of Bel Fuse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data IO and Bel Fuse.
Diversification Opportunities for Data IO and Bel Fuse
Average diversification
The 3 months correlation between Data and Bel is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Data IO and Bel Fuse B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bel Fuse B and Data IO 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 Data IO are associated (or correlated) with Bel Fuse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bel Fuse B has no effect on the direction of Data IO i.e., Data IO and Bel Fuse go up and down completely randomly.
Pair Corralation between Data IO and Bel Fuse
Given the investment horizon of 90 days Data IO is expected to under-perform the Bel Fuse. In addition to that, Data IO is 1.06 times more volatile than Bel Fuse B. It trades about -0.05 of its total potential returns per unit of risk. Bel Fuse B is currently generating about 0.1 per unit of volatility. If you would invest 5,181 in Bel Fuse B on August 27, 2024 and sell it today you would earn a total of 2,760 from holding Bel Fuse B or generate 53.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Data IO vs. Bel Fuse B
Performance |
| Timeline |
| Data IO |
| Bel Fuse B |
Data IO and Bel Fuse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Data IO and Bel Fuse
The main advantage of trading using opposite Data IO and Bel Fuse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data IO position performs unexpectedly, Bel Fuse 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 Bel Fuse will offset losses from the drop in Bel Fuse's long position.| Data IO vs. Maris Tech | Data IO vs. CTS Corporation | Data IO vs. Cps Technologies | Data IO vs. Micropac Industries |
| Bel Fuse vs. Benchmark Electronics | Bel Fuse vs. Methode Electronics | Bel Fuse vs. Richardson Electronics | Bel Fuse vs. Plexus Corp |
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 Correlations module to find global opportunities by holding instruments from different markets.
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