Correlation Between Bel Fuse and International Precious

Can any of the company-specific risk be diversified away by investing in both Bel Fuse and International Precious 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 International Precious 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 International Precious Minerals, you can compare the effects of market volatilities on Bel Fuse and International Precious 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 International Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bel Fuse and International Precious.

Diversification Opportunities for Bel Fuse and International Precious

-0.12

Correlation Coefficient

Bel Fuse  International Precious

Good diversification

The 3 months correlation between Bel and International is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bel Fuse A and International Precious Mineral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Precious 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 International Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Precious has no effect on the direction of Bel Fuse i.e., Bel Fuse and International Precious go up and down completely randomly.

Pair Corralation between Bel Fuse and International Precious

Assuming the 90 days horizon Bel Fuse is expected to generate 134.42 times less return on investment than International Precious. But when comparing it to its historical volatility, Bel Fuse A is 62.8 times less risky than International Precious. It trades about 0.09 of its potential returns per unit of risk. International Precious Minerals is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  0.00  in International Precious Minerals on September 4, 2024 and sell it today you would earn a total of  0.01  from holding International Precious Minerals or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.68%
Values	Daily Returns

Bel Fuse A  vs.  International Precious Mineral

Bel Fuse A

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bel Fuse A are ranked lower than 8 (%) 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.

International Precious

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Precious Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, International Precious is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bel Fuse and International Precious

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

The idea behind Bel Fuse A and International Precious Minerals 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.