Correlation Between Littelfuse and TE Connectivity
Can any of the company-specific risk be diversified away by investing in both Littelfuse 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 Littelfuse and TE Connectivity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Littelfuse and TE Connectivity, you can compare the effects of market volatilities on Littelfuse 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 Littelfuse with a short position of TE Connectivity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Littelfuse and TE Connectivity.
Diversification Opportunities for Littelfuse and TE Connectivity
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Littelfuse and TEL is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Littelfuse and TE Connectivity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TE Connectivity 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 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 Littelfuse i.e., Littelfuse and TE Connectivity go up and down completely randomly.
Pair Corralation between Littelfuse and TE Connectivity
Given the investment horizon of 90 days Littelfuse is expected to generate 5.04 times less return on investment than TE Connectivity. In addition to that, Littelfuse is 1.34 times more volatile than TE Connectivity. It trades about 0.01 of its total potential returns per unit of risk. TE Connectivity is currently generating about 0.04 per unit of volatility. If you would invest 12,344 in TE Connectivity on November 19, 2024 and sell it today you would earn a total of 2,933 from holding TE Connectivity or generate 23.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Littelfuse vs. TE Connectivity
Performance |
| Timeline |
| Littelfuse |
| TE Connectivity |
Littelfuse and TE Connectivity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Littelfuse and TE Connectivity
The main advantage of trading using opposite Littelfuse and TE Connectivity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Littelfuse 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.| Littelfuse vs. Plexus Corp | Littelfuse vs. Celestica | Littelfuse vs. Benchmark Electronics | Littelfuse vs. Flex |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |