Correlation Between Vicor and Bel Fuse
Can any of the company-specific risk be diversified away by investing in both Vicor 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 Vicor and Bel Fuse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vicor and Bel Fuse A, you can compare the effects of market volatilities on Vicor 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 Vicor with a short position of Bel Fuse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicor and Bel Fuse.
Diversification Opportunities for Vicor and Bel Fuse
Modest diversification
The 3 months correlation between Vicor and Bel is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Vicor 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 Vicor 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 Vicor 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 Vicor i.e., Vicor and Bel Fuse go up and down completely randomly.
Pair Corralation between Vicor and Bel Fuse
Given the investment horizon of 90 days Vicor is expected to generate 2.35 times more return on investment than Bel Fuse. However, Vicor is 2.35 times more volatile than Bel Fuse A. It trades about 0.17 of its potential returns per unit of risk. Bel Fuse A is currently generating about -0.04 per unit of risk. If you would invest 4,210 in Vicor on August 30, 2024 and sell it today you would earn a total of 1,334 from holding Vicor or generate 31.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Vicor vs. Bel Fuse A
Performance |
| Timeline |
| Vicor |
| Bel Fuse A |
Vicor and Bel Fuse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vicor and Bel Fuse
The main advantage of trading using opposite Vicor and Bel Fuse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicor 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.The idea behind Vicor 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.| Bel Fuse vs. Fabrinet | Bel Fuse vs. Knowles Cor | Bel Fuse vs. Ubiquiti Networks | Bel Fuse vs. AmpliTech Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |