Correlation Between Aristocrat Leisure and Bell Financial
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure and Bell Financial 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 Aristocrat Leisure and Bell Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure and Bell Financial Group, you can compare the effects of market volatilities on Aristocrat Leisure and Bell Financial 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 Aristocrat Leisure with a short position of Bell Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and Bell Financial.
Diversification Opportunities for Aristocrat Leisure and Bell Financial
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aristocrat and Bell is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure and Bell Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Financial Group and Aristocrat Leisure 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 Aristocrat Leisure are associated (or correlated) with Bell Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Financial Group has no effect on the direction of Aristocrat Leisure i.e., Aristocrat Leisure and Bell Financial go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and Bell Financial
Assuming the 90 days trading horizon Aristocrat Leisure is expected to generate 0.94 times more return on investment than Bell Financial. However, Aristocrat Leisure is 1.07 times less risky than Bell Financial. It trades about 0.2 of its potential returns per unit of risk. Bell Financial Group is currently generating about 0.11 per unit of risk. If you would invest 6,276 in Aristocrat Leisure on November 6, 2024 and sell it today you would earn a total of 1,130 from holding Aristocrat Leisure or generate 18.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristocrat Leisure vs. Bell Financial Group
Performance |
| Timeline |
| Aristocrat Leisure |
| Bell Financial Group |
Aristocrat Leisure and Bell Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and Bell Financial
The main advantage of trading using opposite Aristocrat Leisure and Bell Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure position performs unexpectedly, Bell Financial 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 Bell Financial will offset losses from the drop in Bell Financial's long position.| Aristocrat Leisure vs. Centaurus Metals | Aristocrat Leisure vs. Beston Global Food | Aristocrat Leisure vs. Cleanaway Waste Management | Aristocrat Leisure vs. Aurelia Metals |
| Bell Financial vs. Beam Communications Holdings | Bell Financial vs. Hutchison Telecommunications | Bell Financial vs. Aristocrat Leisure | Bell Financial vs. Bailador Technology Invest |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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