Correlation Between Bell Financial and Carawine Resources
Can any of the company-specific risk be diversified away by investing in both Bell Financial and Carawine Resources 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 Carawine Resources 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 Carawine Resources Limited, you can compare the effects of market volatilities on Bell Financial and Carawine Resources 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 Carawine Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Financial and Carawine Resources.
Diversification Opportunities for Bell Financial and Carawine Resources
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bell and Carawine is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bell Financial Group and Carawine Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carawine Resources 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 Carawine Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carawine Resources has no effect on the direction of Bell Financial i.e., Bell Financial and Carawine Resources go up and down completely randomly.
Pair Corralation between Bell Financial and Carawine Resources
Assuming the 90 days trading horizon Bell Financial Group is expected to generate 0.48 times more return on investment than Carawine Resources. However, Bell Financial Group is 2.06 times less risky than Carawine Resources. It trades about 0.05 of its potential returns per unit of risk. Carawine Resources Limited is currently generating about 0.02 per unit of risk. If you would invest 89.00 in Bell Financial Group on November 2, 2024 and sell it today you would earn a total of 46.00 from holding Bell Financial Group or generate 51.69% 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. Carawine Resources Limited
Performance |
| Timeline |
| Bell Financial Group |
| Carawine Resources |
Bell Financial and Carawine Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Financial and Carawine Resources
The main advantage of trading using opposite Bell Financial and Carawine Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Financial position performs unexpectedly, Carawine Resources 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 Carawine Resources will offset losses from the drop in Carawine Resources' long position.| Bell Financial vs. Aneka Tambang Tbk | Bell Financial vs. BHP Group Limited | Bell Financial vs. Ecofibre | Bell Financial vs. iShares Global Healthcare |
| Carawine Resources vs. Torque Metals | Carawine Resources vs. Queste Communications | Carawine Resources vs. Bluescope Steel | Carawine Resources vs. TPG Telecom |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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