Correlation Between Bel Fuse and UniCredit

Can any of the company-specific risk be diversified away by investing in both Bel Fuse and UniCredit 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 UniCredit 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 UniCredit 5459 percent, you can compare the effects of market volatilities on Bel Fuse and UniCredit 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 UniCredit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bel Fuse and UniCredit.

Diversification Opportunities for Bel Fuse and UniCredit

0.1

Correlation Coefficient

Bel Fuse  UniCredit

Average diversification

The 3 months correlation between Bel and UniCredit is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bel Fuse A and UniCredit 5459 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit 5459 percent 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 UniCredit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UniCredit 5459 percent has no effect on the direction of Bel Fuse i.e., Bel Fuse and UniCredit go up and down completely randomly.

Pair Corralation between Bel Fuse and UniCredit

Assuming the 90 days horizon Bel Fuse A is expected to generate 1.41 times more return on investment than UniCredit. However, Bel Fuse is 1.41 times more volatile than UniCredit 5459 percent. It trades about 0.13 of its potential returns per unit of risk. UniCredit 5459 percent is currently generating about -0.14 per unit of risk. 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 Together
Strength	Insignificant
Accuracy	79.69%
Values	Daily Returns

Bel Fuse A  vs.  UniCredit 5459 percent

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.

UniCredit 5459 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UniCredit 5459 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for UniCredit 5459 percent investors.

Pair Trading with Bel Fuse and UniCredit

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

The idea behind Bel Fuse A and UniCredit 5459 percent 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.