Correlation Between Moving IMage and Belden

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

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

Diversification Opportunities for Moving IMage and Belden

-0.77

Correlation Coefficient

Moving IMage  Belden

Pay attention - limited upside

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

Pair Corralation between Moving IMage and Belden

Given the investment horizon of 90 days Moving iMage Technologies is expected to generate 5.31 times more return on investment than Belden. However, Moving IMage is 5.31 times more volatile than Belden Inc. It trades about 0.07 of its potential returns per unit of risk. Belden Inc is currently generating about -0.36 per unit of risk. If you would invest  48.00  in Moving iMage Technologies on January 28, 2024 and sell it today you would earn a total of  3.00  from holding Moving iMage Technologies or generate 6.25% return on investment over 90 days.

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

Moving iMage Technologies  vs.  Belden Inc

Moving iMage Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moving iMage Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Belden Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Belden Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Belden may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Moving IMage and Belden

The main advantage of trading using opposite Moving IMage and Belden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moving IMage 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 Moving iMage Technologies 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.