Correlation Between Belden and MDB Capital

Can any of the company-specific risk be diversified away by investing in both Belden and MDB Capital 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 Belden and MDB Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Belden Inc and MDB Capital Holdings,, you can compare the effects of market volatilities on Belden and MDB Capital 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 Belden with a short position of MDB Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belden and MDB Capital.

Diversification Opportunities for Belden and MDB Capital

0.12

Correlation Coefficient

Belden  MDB Capital

Average diversification

The 3 months correlation between Belden and MDB is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Belden Inc and MDB Capital Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDB Capital Holdings, and Belden 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 Belden Inc are associated (or correlated) with MDB Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDB Capital Holdings, has no effect on the direction of Belden i.e., Belden and MDB Capital go up and down completely randomly.

Pair Corralation between Belden and MDB Capital

Considering the 90-day investment horizon Belden Inc is expected to generate 0.49 times more return on investment than MDB Capital. However, Belden Inc is 2.05 times less risky than MDB Capital. It trades about 0.04 of its potential returns per unit of risk. MDB Capital Holdings, is currently generating about -0.02 per unit of risk. If you would invest  8,384  in Belden Inc on October 25, 2024 and sell it today you would earn a total of  3,687  from holding Belden Inc or generate 43.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	67.95%
Values	Daily Returns

Belden Inc  vs.  MDB Capital Holdings,

Belden Inc

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Belden Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Belden is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

MDB Capital Holdings,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MDB Capital Holdings, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, MDB Capital is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Belden and MDB Capital

The main advantage of trading using opposite Belden and MDB Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belden position performs unexpectedly, MDB Capital 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 MDB Capital will offset losses from the drop in MDB Capital's long position.

The idea behind Belden Inc and MDB Capital Holdings, 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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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.