Correlation Between 04621XAN8 and Bel Fuse

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Can any of the company-specific risk be diversified away by investing in both 04621XAN8 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 04621XAN8 and Bel Fuse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIZ 265 15 JAN 32 and Bel Fuse A, you can compare the effects of market volatilities on 04621XAN8 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 04621XAN8 with a short position of Bel Fuse. Check out your portfolio center. Please also check ongoing floating volatility patterns of 04621XAN8 and Bel Fuse.

Diversification Opportunities for 04621XAN8 and Bel Fuse

0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between 04621XAN8 and Bel is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding AIZ 265 15 JAN 32 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 04621XAN8 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 AIZ 265 15 JAN 32 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 04621XAN8 i.e., 04621XAN8 and Bel Fuse go up and down completely randomly.

Pair Corralation between 04621XAN8 and Bel Fuse

Assuming the 90 days trading horizon AIZ 265 15 JAN 32 is expected to under-perform the Bel Fuse. In addition to that, 04621XAN8 is 1.03 times more volatile than Bel Fuse A. It trades about -0.16 of its total potential returns per unit of risk. Bel Fuse A is currently generating about 0.11 per unit of volatility. If you would invest  8,644  in Bel Fuse A on September 4, 2024 and sell it today you would earn a total of  1,328  from holding Bel Fuse A or generate 15.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy65.63%
ValuesDaily Returns

AIZ 265 15 JAN 32  vs.  Bel Fuse A

 Performance 
       Timeline  
AIZ 265 15 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AIZ 265 15 JAN 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for AIZ 265 15 JAN 32 investors.
Bel Fuse A 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Bel Fuse A are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting technical and fundamental indicators, Bel Fuse sustained solid returns over the last few months and may actually be approaching a breakup point.

04621XAN8 and Bel Fuse Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 04621XAN8 and Bel Fuse

The main advantage of trading using opposite 04621XAN8 and Bel Fuse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 04621XAN8 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.
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The idea behind AIZ 265 15 JAN 32 and Bel Fuse A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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