Correlation Between Bell Food and Warehouse REIT
Can any of the company-specific risk be diversified away by investing in both Bell Food and Warehouse REIT 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 Warehouse REIT 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 Warehouse REIT plc, you can compare the effects of market volatilities on Bell Food and Warehouse REIT 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 Warehouse REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Food and Warehouse REIT.
Diversification Opportunities for Bell Food and Warehouse REIT
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bell and Warehouse is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bell Food Group and Warehouse REIT plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warehouse REIT plc 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 Warehouse REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warehouse REIT plc has no effect on the direction of Bell Food i.e., Bell Food and Warehouse REIT go up and down completely randomly.
Pair Corralation between Bell Food and Warehouse REIT
Assuming the 90 days trading horizon Bell Food Group is expected to generate 0.85 times more return on investment than Warehouse REIT. However, Bell Food Group is 1.18 times less risky than Warehouse REIT. It trades about 0.03 of its potential returns per unit of risk. Warehouse REIT plc is currently generating about 0.0 per unit of risk. If you would invest 25,097 in Bell Food Group on September 14, 2024 and sell it today you would earn a total of 1,403 from holding Bell Food Group or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Bell Food Group vs. Warehouse REIT plc
Performance |
| Timeline |
| Bell Food Group |
| Warehouse REIT plc |
Bell Food and Warehouse REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Food and Warehouse REIT
The main advantage of trading using opposite Bell Food and Warehouse REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Food position performs unexpectedly, Warehouse REIT 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 Warehouse REIT will offset losses from the drop in Warehouse REIT's long position.| Bell Food vs. Europa Metals | Bell Food vs. Silvercorp Metals | Bell Food vs. Lundin Mining Corp | Bell Food vs. Central Asia Metals |
| Warehouse REIT vs. Roebuck Food Group | Warehouse REIT vs. Veolia Environnement VE | Warehouse REIT vs. Ironveld Plc | Warehouse REIT vs. Associated British Foods |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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