Correlation Between Seagate Technology and Bel Fuse

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

By analyzing existing cross correlation between Seagate Technology PLC and Bel Fuse A, you can compare the effects of market volatilities on Seagate Technology and Bel Fuse 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 Seagate Technology with a short position of Bel Fuse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seagate Technology and Bel Fuse.

Diversification Opportunities for Seagate Technology and Bel Fuse

-0.01

Correlation Coefficient

Seagate Technology  Bel Fuse

Good diversification

The 3 months correlation between Seagate and Bel is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Seagate Technology PLC and Bel Fuse A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bel Fuse A and Seagate Technology 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 Seagate Technology PLC are associated (or correlated) with Bel Fuse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bel Fuse A has no effect on the direction of Seagate Technology i.e., Seagate Technology and Bel Fuse go up and down completely randomly.

Pair Corralation between Seagate Technology and Bel Fuse

Considering the 90-day investment horizon Seagate Technology PLC is expected to generate 1.03 times more return on investment than Bel Fuse. However, Seagate Technology is 1.03 times more volatile than Bel Fuse A. It trades about 0.18 of its potential returns per unit of risk. Bel Fuse A is currently generating about -0.06 per unit of risk. If you would invest  8,729  in Seagate Technology PLC on March 7, 2025 and sell it today you would earn a total of  4,035  from holding Seagate Technology PLC or generate 46.23% return on investment over 90 days.

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

Seagate Technology PLC  vs.  Bel Fuse A

Seagate Technology PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Seagate Technology PLC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Seagate Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Bel Fuse A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bel Fuse A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in July 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Seagate Technology and Bel Fuse

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

The idea behind Seagate Technology PLC and Bel Fuse A 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..