Correlation Between Bell Financial and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Bell Financial and Commonwealth Bank 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 Financial and Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Financial Group and Commonwealth Bank of, you can compare the effects of market volatilities on Bell Financial and Commonwealth Bank 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 Financial with a short position of Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Financial and Commonwealth Bank.
Diversification Opportunities for Bell Financial and Commonwealth Bank
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bell and Commonwealth is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bell Financial Group and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank and Bell Financial 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 Financial Group are associated (or correlated) with Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of Bell Financial i.e., Bell Financial and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Bell Financial and Commonwealth Bank
Assuming the 90 days trading horizon Bell Financial Group is expected to generate 6.05 times more return on investment than Commonwealth Bank. However, Bell Financial is 6.05 times more volatile than Commonwealth Bank of. It trades about 0.05 of its potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.06 per unit of risk. If you would invest 88.00 in Bell Financial Group on September 14, 2024 and sell it today you would earn a total of 46.00 from holding Bell Financial Group or generate 52.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bell Financial Group vs. Commonwealth Bank of
Performance |
| Timeline |
| Bell Financial Group |
| Commonwealth Bank |
Bell Financial and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Financial and Commonwealth Bank
The main advantage of trading using opposite Bell Financial and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Financial position performs unexpectedly, Commonwealth Bank 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 Commonwealth Bank will offset losses from the drop in Commonwealth Bank's long position.| Bell Financial vs. REGAL ASIAN INVESTMENTS | Bell Financial vs. Auctus Alternative Investments | Bell Financial vs. Super Retail Group | Bell Financial vs. Charter Hall Education |
| Commonwealth Bank vs. Bell Financial Group | Commonwealth Bank vs. Insignia Financial | Commonwealth Bank vs. Kkr Credit Income | Commonwealth Bank vs. Land Homes Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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