Correlation Between World Houseware and Bel Fuse
Can any of the company-specific risk be diversified away by investing in both World Houseware 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 World Houseware and Bel Fuse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Houseware Limited and Bel Fuse A, you can compare the effects of market volatilities on World Houseware 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 World Houseware with a short position of Bel Fuse. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Houseware and Bel Fuse.
Diversification Opportunities for World Houseware and Bel Fuse
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between World and Bel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding World Houseware Limited 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 World Houseware 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 World Houseware Limited 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 World Houseware i.e., World Houseware and Bel Fuse go up and down completely randomly.
Pair Corralation between World Houseware and Bel Fuse
Assuming the 90 days horizon World Houseware Limited is expected to under-perform the Bel Fuse. In addition to that, World Houseware is 1.37 times more volatile than Bel Fuse A. It trades about -0.01 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 3,415 in Bel Fuse A on August 24, 2024 and sell it today you would earn a total of 6,176 from holding Bel Fuse A or generate 180.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
World Houseware Limited vs. Bel Fuse A
Performance |
| Timeline |
| World Houseware |
| Bel Fuse A |
World Houseware and Bel Fuse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Houseware and Bel Fuse
The main advantage of trading using opposite World Houseware and Bel Fuse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Houseware 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.| World Houseware vs. Trane Technologies plc | World Houseware vs. Carrier Global Corp | World Houseware vs. Johnson Controls International | World Houseware vs. Daikin IndustriesLtd |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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