Correlation Between FIDELITY and Bel Fuse

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

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

Diversification Opportunities for FIDELITY and Bel Fuse

-0.1

Correlation Coefficient

FIDELITY  Bel Fuse

Good diversification

The 3 months correlation between FIDELITY and Bel is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding FIDELITY NATIONAL INFORMATION and Bel Fuse A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bel Fuse A and FIDELITY 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 FIDELITY NATIONAL INFORMATION are associated (or correlated) with Bel Fuse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bel Fuse A has no effect on the direction of FIDELITY i.e., FIDELITY and Bel Fuse go up and down completely randomly.

Pair Corralation between FIDELITY and Bel Fuse

Assuming the 90 days trading horizon FIDELITY NATIONAL INFORMATION is expected to under-perform the Bel Fuse. But the bond apears to be less risky and, when comparing its historical volatility, FIDELITY NATIONAL INFORMATION is 3.15 times less risky than Bel Fuse. The bond trades about -0.16 of its potential returns per unit of risk. The Bel Fuse A is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  8,595  in Bel Fuse A on September 5, 2024 and sell it today you would earn a total of  1,586  from holding Bel Fuse A or generate 18.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.94%
Values	Daily Returns

FIDELITY NATIONAL INFORMATION  vs.  Bel Fuse A

FIDELITY NATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIDELITY NATIONAL INFORMATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for FIDELITY NATIONAL INFORMATION investors.

Bel Fuse A

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bel Fuse A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting technical and fundamental indicators, Bel Fuse sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FIDELITY and Bel Fuse

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

The idea behind FIDELITY NATIONAL INFORMATION and Bel Fuse A 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.