Correlation Between Bell Financial and Insignia Financial
Can any of the company-specific risk be diversified away by investing in both Bell Financial and Insignia 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 Bell Financial and Insignia Financial 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 Insignia Financial, you can compare the effects of market volatilities on Bell Financial and Insignia 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 Bell Financial with a short position of Insignia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Financial and Insignia Financial.
Diversification Opportunities for Bell Financial and Insignia Financial
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bell and Insignia is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bell Financial Group and Insignia Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insignia Financial 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 Insignia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insignia Financial has no effect on the direction of Bell Financial i.e., Bell Financial and Insignia Financial go up and down completely randomly.
Pair Corralation between Bell Financial and Insignia Financial
Assuming the 90 days trading horizon Bell Financial is expected to generate 14.19 times less return on investment than Insignia Financial. But when comparing it to its historical volatility, Bell Financial Group is 4.58 times less risky than Insignia Financial. It trades about 0.11 of its potential returns per unit of risk. Insignia Financial is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 358.00 in Insignia Financial on October 23, 2024 and sell it today you would earn a total of 87.00 from holding Insignia Financial or generate 24.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Bell Financial Group vs. Insignia Financial
Performance |
| Timeline |
| Bell Financial Group |
| Insignia Financial |
Bell Financial and Insignia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Financial and Insignia Financial
The main advantage of trading using opposite Bell Financial and Insignia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Financial position performs unexpectedly, Insignia 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 Insignia Financial will offset losses from the drop in Insignia Financial's long position.| Bell Financial vs. Westpac Banking | Bell Financial vs. National Australia Bank | Bell Financial vs. National Australia Bank | Bell Financial vs. National Australia Bank |
| Insignia Financial vs. Aneka Tambang Tbk | Insignia Financial vs. Commonwealth Bank of | Insignia Financial vs. Australia and New | Insignia Financial vs. ANZ Group Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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