Correlation Between Belden and SCHMID Group

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

By analyzing existing cross correlation between Belden Inc and SCHMID Group NV, you can compare the effects of market volatilities on Belden and SCHMID Group 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 SCHMID Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belden and SCHMID Group.

Diversification Opportunities for Belden and SCHMID Group

-0.49

Correlation Coefficient

Belden  SCHMID Group

Very good diversification

The 3 months correlation between Belden and SCHMID is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Belden Inc and SCHMID Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHMID Group NV 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 SCHMID Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHMID Group NV has no effect on the direction of Belden i.e., Belden and SCHMID Group go up and down completely randomly.

Pair Corralation between Belden and SCHMID Group

Considering the 90-day investment horizon Belden Inc is expected to generate 0.38 times more return on investment than SCHMID Group. However, Belden Inc is 2.63 times less risky than SCHMID Group. It trades about 0.05 of its potential returns per unit of risk. SCHMID Group NV is currently generating about -0.08 per unit of risk. If you would invest  7,671  in Belden Inc on October 10, 2024 and sell it today you would earn a total of  3,776  from holding Belden Inc or generate 49.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	35.35%
Values	Daily Returns

Belden Inc  vs.  SCHMID Group NV

Belden Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Belden Inc has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

SCHMID Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCHMID Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Belden and SCHMID Group

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

The idea behind Belden Inc and SCHMID Group NV 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.