Correlation Between NETGEAR and Bel Fuse
Can any of the company-specific risk be diversified away by investing in both NETGEAR 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 NETGEAR and Bel Fuse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NETGEAR and Bel Fuse A, you can compare the effects of market volatilities on NETGEAR 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 NETGEAR with a short position of Bel Fuse. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and Bel Fuse.
Diversification Opportunities for NETGEAR and Bel Fuse
Very weak diversification
The 3 months correlation between NETGEAR and Bel is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Bel Fuse A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bel Fuse A and NETGEAR 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 NETGEAR 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 A has no effect on the direction of NETGEAR i.e., NETGEAR and Bel Fuse go up and down completely randomly.
Pair Corralation between NETGEAR and Bel Fuse
Given the investment horizon of 90 days NETGEAR is expected to generate 1.04 times less return on investment than Bel Fuse. In addition to that, NETGEAR is 1.2 times more volatile than Bel Fuse A. It trades about 0.06 of its total potential returns per unit of risk. Bel Fuse A is currently generating about 0.08 per unit of volatility. If you would invest 5,154 in Bel Fuse A on August 26, 2024 and sell it today you would earn a total of 4,251 from holding Bel Fuse A or generate 82.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
NETGEAR vs. Bel Fuse A
Performance |
| Timeline |
| NETGEAR |
| Bel Fuse A |
NETGEAR and Bel Fuse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NETGEAR and Bel Fuse
The main advantage of trading using opposite NETGEAR and Bel Fuse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR 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.| NETGEAR vs. Ichor Holdings | NETGEAR vs. Fabrinet | NETGEAR vs. Hello Group | NETGEAR vs. Ultra Clean Holdings |
| Bel Fuse vs. Plexus Corp | Bel Fuse vs. Benchmark Electronics | Bel Fuse vs. Jabil Circuit | Bel Fuse 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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