Correlation Between Logility Supply and Belden

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

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

Diversification Opportunities for Logility Supply and Belden

0.25

Correlation Coefficient

Logility Supply  Belden

Modest diversification

The 3 months correlation between Logility and Belden is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Logility Supply Chain and Belden Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belden Inc and Logility Supply 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 Logility Supply Chain 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 Logility Supply i.e., Logility Supply and Belden go up and down completely randomly.

Pair Corralation between Logility Supply and Belden

Given the investment horizon of 90 days Logility Supply Chain is expected to under-perform the Belden. In addition to that, Logility Supply is 1.0 times more volatile than Belden Inc. It trades about -0.01 of its total potential returns per unit of risk. Belden Inc is currently generating about 0.04 per unit of volatility. If you would invest  8,074  in Belden Inc on October 22, 2024 and sell it today you would earn a total of  3,660  from holding Belden Inc or generate 45.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Logility Supply Chain  vs.  Belden Inc

Logility Supply Chain

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Logility Supply Chain are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Logility Supply may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Belden Inc

Risk-Adjusted Performance

1 of 100

Very 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.

Pair Trading with Logility Supply and Belden

The main advantage of trading using opposite Logility Supply and Belden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logility Supply 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 Logility Supply Chain 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.