Correlation Between Bel Fuse and Intellicheck Mobilisa

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

By analyzing existing cross correlation between Bel Fuse A and Intellicheck Mobilisa, you can compare the effects of market volatilities on Bel Fuse and Intellicheck Mobilisa 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 Bel Fuse with a short position of Intellicheck Mobilisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bel Fuse and Intellicheck Mobilisa.

Diversification Opportunities for Bel Fuse and Intellicheck Mobilisa

-0.45

Correlation Coefficient

Bel Fuse  Intellicheck Mobilisa

Very good diversification

The 3 months correlation between Bel and Intellicheck is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bel Fuse A and Intellicheck Mobilisa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intellicheck Mobilisa and Bel Fuse 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 Bel Fuse A are associated (or correlated) with Intellicheck Mobilisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intellicheck Mobilisa has no effect on the direction of Bel Fuse i.e., Bel Fuse and Intellicheck Mobilisa go up and down completely randomly.

Pair Corralation between Bel Fuse and Intellicheck Mobilisa

Assuming the 90 days horizon Bel Fuse A is expected to under-perform the Intellicheck Mobilisa. But the stock apears to be less risky and, when comparing its historical volatility, Bel Fuse A is 1.12 times less risky than Intellicheck Mobilisa. The stock trades about -0.17 of its potential returns per unit of risk. The Intellicheck Mobilisa is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  302.00  in Intellicheck Mobilisa on October 8, 2024 and sell it today you would lose (12.00) from holding Intellicheck Mobilisa or give up 3.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bel Fuse A  vs.  Intellicheck Mobilisa

Bel Fuse A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bel Fuse A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Intellicheck Mobilisa

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intellicheck Mobilisa are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Intellicheck Mobilisa displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bel Fuse and Intellicheck Mobilisa

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

The idea behind Bel Fuse A and Intellicheck Mobilisa 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..