Correlation Between Bell Food and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Bell Food and XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC, you can compare the effects of market volatilities on Bell Food and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Food and XLMedia PLC.
Diversification Opportunities for Bell Food and XLMedia PLC
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bell and XLMedia is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bell Food Group and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Bell Food i.e., Bell Food and XLMedia PLC go up and down completely randomly.
Pair Corralation between Bell Food and XLMedia PLC
Assuming the 90 days trading horizon Bell Food Group is expected to generate 0.31 times more return on investment than XLMedia PLC. However, Bell Food Group is 3.22 times less risky than XLMedia PLC. It trades about -0.07 of its potential returns per unit of risk. XLMedia PLC is currently generating about -0.05 per unit of risk. If you would invest 26,350 in Bell Food Group on October 30, 2024 and sell it today you would lose (950.00) from holding Bell Food Group or give up 3.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bell Food Group vs. XLMedia PLC
Performance |
| Timeline |
| Bell Food Group |
| XLMedia PLC |
Bell Food and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Food and XLMedia PLC
The main advantage of trading using opposite Bell Food and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Food position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| Bell Food vs. Ross Stores | Bell Food vs. EVS Broadcast Equipment | Bell Food vs. European Metals Holdings | Bell Food vs. Gaztransport et Technigaz |
| XLMedia PLC vs. Livermore Investments Group | XLMedia PLC vs. Mobius Investment Trust | XLMedia PLC vs. Lindsell Train Investment | XLMedia PLC vs. FC Investment Trust |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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