Correlation Between Bell Food and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both Bell Food and Lindsell Train 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 Lindsell Train 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 Lindsell Train Investment, you can compare the effects of market volatilities on Bell Food and Lindsell Train 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 Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Food and Lindsell Train.
Diversification Opportunities for Bell Food and Lindsell Train
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bell and Lindsell is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bell Food Group and Lindsell Train Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsell Train Investment 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 Lindsell Train. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsell Train Investment has no effect on the direction of Bell Food i.e., Bell Food and Lindsell Train go up and down completely randomly.
Pair Corralation between Bell Food and Lindsell Train
Assuming the 90 days trading horizon Bell Food Group is expected to under-perform the Lindsell Train. In addition to that, Bell Food is 1.03 times more volatile than Lindsell Train Investment. It trades about -0.06 of its total potential returns per unit of risk. Lindsell Train Investment is currently generating about 0.18 per unit of volatility. If you would invest 78,600 in Lindsell Train Investment on October 20, 2024 and sell it today you would earn a total of 3,800 from holding Lindsell Train Investment or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Bell Food Group vs. Lindsell Train Investment
Performance |
| Timeline |
| Bell Food Group |
| Lindsell Train Investment |
Bell Food and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Food and Lindsell Train
The main advantage of trading using opposite Bell Food and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Food position performs unexpectedly, Lindsell Train 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 Lindsell Train will offset losses from the drop in Lindsell Train's long position.| Bell Food vs. Wheaton Precious Metals | Bell Food vs. Monster Beverage Corp | Bell Food vs. Datagroup SE | Bell Food vs. Metals Exploration Plc |
| Lindsell Train vs. CNH Industrial NV | Lindsell Train vs. Ecofin Global Utilities | Lindsell Train vs. AMG Advanced Metallurgical | Lindsell Train vs. Tyson Foods Cl |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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