Correlation Between Belden and PRAXAIR

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

By analyzing existing cross correlation between Belden Inc and PRAXAIR INC 32, you can compare the effects of market volatilities on Belden and PRAXAIR 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 PRAXAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belden and PRAXAIR.

Diversification Opportunities for Belden and PRAXAIR

0.0

Correlation Coefficient

Belden  PRAXAIR

Pay attention - limited upside

The 3 months correlation between Belden and PRAXAIR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Belden Inc and PRAXAIR INC 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRAXAIR INC 32 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 PRAXAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRAXAIR INC 32 has no effect on the direction of Belden i.e., Belden and PRAXAIR go up and down completely randomly.

Pair Corralation between Belden and PRAXAIR

If you would invest  11,349  in Belden Inc on October 23, 2024 and sell it today you would earn a total of  730.00  from holding Belden Inc or generate 6.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Belden Inc  vs.  PRAXAIR INC 32

Belden Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Belden Inc are ranked lower than 1 (%) 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.

PRAXAIR INC 32

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PRAXAIR INC 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PRAXAIR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Belden and PRAXAIR

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

The idea behind Belden Inc and PRAXAIR INC 32 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.