Correlation Between Quanex Building and Belden

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

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

Diversification Opportunities for Quanex Building and Belden

0.36

Correlation Coefficient

Quanex Building  Belden

Weak diversification

The 3 months correlation between Quanex and Belden is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Quanex Building Products and Belden Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belden Inc and Quanex Building 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 Quanex Building Products 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 Quanex Building i.e., Quanex Building and Belden go up and down completely randomly.

Pair Corralation between Quanex Building and Belden

Allowing for the 90-day total investment horizon Quanex Building is expected to generate 344.0 times less return on investment than Belden. In addition to that, Quanex Building is 1.39 times more volatile than Belden Inc. It trades about 0.0 of its total potential returns per unit of risk. Belden Inc is currently generating about 0.05 per unit of volatility. If you would invest  10,273  in Belden Inc on March 20, 2025 and sell it today you would earn a total of  614.00  from holding Belden Inc or generate 5.98% return on investment over 90 days.

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

Quanex Building Products  vs.  Belden Inc

Quanex Building Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quanex Building Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Quanex Building is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Belden Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Belden Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Belden may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Quanex Building and Belden

The main advantage of trading using opposite Quanex Building and Belden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanex Building 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 Quanex Building Products 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.