Correlation Between Littelfuse and Amphenol
Can any of the company-specific risk be diversified away by investing in both Littelfuse and Amphenol 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 Littelfuse and Amphenol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Littelfuse and Amphenol, you can compare the effects of market volatilities on Littelfuse and Amphenol 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 Littelfuse with a short position of Amphenol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Littelfuse and Amphenol.
Diversification Opportunities for Littelfuse and Amphenol
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Littelfuse and Amphenol is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Littelfuse and Amphenol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphenol and Littelfuse 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 Littelfuse are associated (or correlated) with Amphenol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphenol has no effect on the direction of Littelfuse i.e., Littelfuse and Amphenol go up and down completely randomly.
Pair Corralation between Littelfuse and Amphenol
Given the investment horizon of 90 days Littelfuse is expected to under-perform the Amphenol. But the stock apears to be less risky and, when comparing its historical volatility, Littelfuse is 2.6 times less risky than Amphenol. The stock trades about -0.08 of its potential returns per unit of risk. The Amphenol is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 7,156 in Amphenol on October 26, 2024 and sell it today you would earn a total of 628.00 from holding Amphenol or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Littelfuse vs. Amphenol
Performance |
| Timeline |
| Littelfuse |
| Amphenol |
Littelfuse and Amphenol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Littelfuse and Amphenol
The main advantage of trading using opposite Littelfuse and Amphenol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Littelfuse position performs unexpectedly, Amphenol 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 Amphenol will offset losses from the drop in Amphenol's long position.| Littelfuse vs. Plexus Corp | Littelfuse vs. Celestica | Littelfuse vs. Benchmark Electronics | Littelfuse vs. Flex |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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