Correlation Between Advanced Medical and Bell Food
Can any of the company-specific risk be diversified away by investing in both Advanced Medical and Bell Food 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 Advanced Medical and Bell Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Bell Food Group, you can compare the effects of market volatilities on Advanced Medical and Bell Food 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 Advanced Medical with a short position of Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Bell Food.
Diversification Opportunities for Advanced Medical and Bell Food
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Advanced and Bell is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Bell Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Food Group and Advanced Medical 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 Advanced Medical Solutions are associated (or correlated) with Bell Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Food Group has no effect on the direction of Advanced Medical i.e., Advanced Medical and Bell Food go up and down completely randomly.
Pair Corralation between Advanced Medical and Bell Food
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to under-perform the Bell Food. In addition to that, Advanced Medical is 4.16 times more volatile than Bell Food Group. It trades about -0.18 of its total potential returns per unit of risk. Bell Food Group is currently generating about 0.07 per unit of volatility. If you would invest 26,450 in Bell Food Group on September 4, 2024 and sell it today you would earn a total of 250.00 from holding Bell Food Group or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Bell Food Group
Performance |
| Timeline |
| Advanced Medical Sol |
| Bell Food Group |
Advanced Medical and Bell Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Bell Food
The main advantage of trading using opposite Advanced Medical and Bell Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical position performs unexpectedly, Bell Food 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 Food will offset losses from the drop in Bell Food's long position.| Advanced Medical vs. Samsung Electronics Co | Advanced Medical vs. Samsung Electronics Co | Advanced Medical vs. Hyundai Motor | Advanced Medical vs. Toyota Motor Corp |
| Bell Food vs. CAP LEASE AVIATION | Bell Food vs. Advanced Medical Solutions | Bell Food vs. Fresenius Medical Care | Bell Food vs. United Internet AG |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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