Correlation Between Bolt Projects and Belden

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

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

Diversification Opportunities for Bolt Projects and Belden

-0.34

Correlation Coefficient

Bolt Projects  Belden

Very good diversification

The 3 months correlation between Bolt and Belden is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bolt Projects Holdings, and Belden Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belden Inc and Bolt Projects 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 Bolt Projects Holdings, are associated (or correlated) with Belden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belden Inc has no effect on the direction of Bolt Projects i.e., Bolt Projects and Belden go up and down completely randomly.

Pair Corralation between Bolt Projects and Belden

Assuming the 90 days horizon Bolt Projects Holdings, is expected to generate 24.5 times more return on investment than Belden. However, Bolt Projects is 24.5 times more volatile than Belden Inc. It trades about 0.1 of its potential returns per unit of risk. Belden Inc is currently generating about 0.05 per unit of risk. If you would invest  20.00  in Bolt Projects Holdings, on October 10, 2024 and sell it today you would lose (16.00) from holding Bolt Projects Holdings, or give up 80.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	13.33%
Values	Daily Returns

Bolt Projects Holdings,  vs.  Belden Inc

Bolt Projects Holdings,

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bolt Projects Holdings, are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting forward-looking signals, Bolt Projects showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Bolt Projects and Belden

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

The idea behind Bolt Projects Holdings, and Belden Inc 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.