Correlation Between Bell Food and URU Metals
Can any of the company-specific risk be diversified away by investing in both Bell Food and URU Metals 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 URU Metals 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 URU Metals, you can compare the effects of market volatilities on Bell Food and URU Metals 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 URU Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Food and URU Metals.
Diversification Opportunities for Bell Food and URU Metals
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bell and URU is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bell Food Group and URU Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on URU Metals 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 URU Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of URU Metals has no effect on the direction of Bell Food i.e., Bell Food and URU Metals go up and down completely randomly.
Pair Corralation between Bell Food and URU Metals
Assuming the 90 days trading horizon Bell Food Group is expected to generate 0.49 times more return on investment than URU Metals. However, Bell Food Group is 2.05 times less risky than URU Metals. It trades about 0.09 of its potential returns per unit of risk. URU Metals is currently generating about 0.01 per unit of risk. If you would invest 26,500 in Bell Food Group on October 12, 2024 and sell it today you would earn a total of 500.00 from holding Bell Food Group or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Bell Food Group vs. URU Metals
Performance |
| Timeline |
| Bell Food Group |
| URU Metals |
Bell Food and URU Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Food and URU Metals
The main advantage of trading using opposite Bell Food and URU Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Food position performs unexpectedly, URU Metals 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 URU Metals will offset losses from the drop in URU Metals' long position.| Bell Food vs. Iron Mountain | Bell Food vs. Thor Mining PLC | Bell Food vs. Hochschild Mining plc | Bell Food vs. Coeur Mining |
| URU Metals vs. Edita Food Industries | URU Metals vs. Bell Food Group | URU Metals vs. Lindsell Train Investment | URU Metals vs. Europa Metals |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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