Correlation Between AT S and Bel Fuse
Can any of the company-specific risk be diversified away by investing in both AT S 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 AT S and Bel Fuse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AT S Austria and Bel Fuse A, you can compare the effects of market volatilities on AT S 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 AT S with a short position of Bel Fuse. Check out your portfolio center. Please also check ongoing floating volatility patterns of AT S and Bel Fuse.
Diversification Opportunities for AT S and Bel Fuse
Very poor diversification
The 3 months correlation between ASAAF and Bel is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding AT S Austria 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 AT S 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 AT S Austria 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 AT S i.e., AT S and Bel Fuse go up and down completely randomly.
Pair Corralation between AT S and Bel Fuse
Assuming the 90 days horizon AT S Austria is expected to generate 0.67 times more return on investment than Bel Fuse. However, AT S Austria is 1.5 times less risky than Bel Fuse. It trades about 0.16 of its potential returns per unit of risk. Bel Fuse A is currently generating about -0.08 per unit of risk. If you would invest 1,253 in AT S Austria on December 3, 2024 and sell it today you would earn a total of 125.00 from holding AT S Austria or generate 9.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 97.56% |
Values | Daily Returns |
AT S Austria vs. Bel Fuse A
Performance |
Timeline |
AT S Austria |
Bel Fuse A |
AT S and Bel Fuse Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AT S and Bel Fuse
The main advantage of trading using opposite AT S and Bel Fuse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AT S 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 AT S Austria 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. Richardson Electronics | Bel Fuse vs. LSI Industries | Bel Fuse vs. Benchmark Electronics | Bel Fuse vs. Plexus Corp |
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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