Correlation Between Bell Food and International Biotechnology
Can any of the company-specific risk be diversified away by investing in both Bell Food and International Biotechnology 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 Bell Food and International Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Food Group and International Biotechnology Trust, you can compare the effects of market volatilities on Bell Food and International Biotechnology 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 Bell Food with a short position of International Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Food and International Biotechnology.
Diversification Opportunities for Bell Food and International Biotechnology
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bell and International is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bell Food Group and International Biotechnology Tr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Biotechnology and Bell Food 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 Bell Food Group are associated (or correlated) with International Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Biotechnology has no effect on the direction of Bell Food i.e., Bell Food and International Biotechnology go up and down completely randomly.
Pair Corralation between Bell Food and International Biotechnology
Assuming the 90 days trading horizon Bell Food is expected to generate 1.42 times less return on investment than International Biotechnology. But when comparing it to its historical volatility, Bell Food Group is 1.14 times less risky than International Biotechnology. It trades about 0.02 of its potential returns per unit of risk. International Biotechnology Trust is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 65,300 in International Biotechnology Trust on September 4, 2024 and sell it today you would earn a total of 5,700 from holding International Biotechnology Trust or generate 8.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bell Food Group vs. International Biotechnology Tr
Performance |
| Timeline |
| Bell Food Group |
| International Biotechnology |
Bell Food and International Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Food and International Biotechnology
The main advantage of trading using opposite Bell Food and International Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Food position performs unexpectedly, International Biotechnology 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 International Biotechnology will offset losses from the drop in International Biotechnology's long position.| Bell Food vs. CAP LEASE AVIATION | Bell Food vs. Advanced Medical Solutions | Bell Food vs. Fresenius Medical Care | Bell Food vs. United Internet AG |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |