Correlation Between SCHMID Group and Belden

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

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

Diversification Opportunities for SCHMID Group and Belden

-0.77

Correlation Coefficient

SCHMID Group  Belden

Pay attention - limited upside

The 3 months correlation between SCHMID and Belden is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SCHMID Group NV and Belden Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belden Inc and SCHMID Group 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 SCHMID Group NV 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 SCHMID Group i.e., SCHMID Group and Belden go up and down completely randomly.

Pair Corralation between SCHMID Group and Belden

Given the investment horizon of 90 days SCHMID Group NV is expected to under-perform the Belden. In addition to that, SCHMID Group is 1.7 times more volatile than Belden Inc. It trades about -0.16 of its total potential returns per unit of risk. Belden Inc is currently generating about 0.07 per unit of volatility. If you would invest  11,768  in Belden Inc on August 31, 2024 and sell it today you would earn a total of  419.00  from holding Belden Inc or generate 3.56% return on investment over 90 days.

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

SCHMID Group NV  vs.  Belden Inc

SCHMID Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCHMID Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Belden Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Belden Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Belden exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SCHMID Group and Belden

The main advantage of trading using opposite SCHMID Group and Belden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCHMID Group 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 SCHMID Group NV 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.