Correlation Between Bell Financial and Perpetual Credit
Can any of the company-specific risk be diversified away by investing in both Bell Financial and Perpetual Credit 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 Perpetual Credit 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 Perpetual Credit Income, you can compare the effects of market volatilities on Bell Financial and Perpetual Credit 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 Perpetual Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Financial and Perpetual Credit.
Diversification Opportunities for Bell Financial and Perpetual Credit
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bell and Perpetual is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bell Financial Group and Perpetual Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perpetual Credit Income 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 Perpetual Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perpetual Credit Income has no effect on the direction of Bell Financial i.e., Bell Financial and Perpetual Credit go up and down completely randomly.
Pair Corralation between Bell Financial and Perpetual Credit
Assuming the 90 days trading horizon Bell Financial Group is expected to generate 1.12 times more return on investment than Perpetual Credit. However, Bell Financial is 1.12 times more volatile than Perpetual Credit Income. It trades about 0.11 of its potential returns per unit of risk. Perpetual Credit Income is currently generating about 0.0 per unit of risk. If you would invest 134.00 in Bell Financial Group on October 23, 2024 and sell it today you would earn a total of 2.00 from holding Bell Financial Group or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bell Financial Group vs. Perpetual Credit Income
Performance |
| Timeline |
| Bell Financial Group |
| Perpetual Credit Income |
Bell Financial and Perpetual Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Financial and Perpetual Credit
The main advantage of trading using opposite Bell Financial and Perpetual Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Financial position performs unexpectedly, Perpetual Credit 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 Perpetual Credit will offset losses from the drop in Perpetual Credit'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 |
| Perpetual Credit vs. ABACUS STORAGE KING | Perpetual Credit vs. Odyssey Energy | Perpetual Credit vs. Emeco Holdings | Perpetual Credit vs. Nine Entertainment Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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