Correlation Between Bell Financial and Xero
Can any of the company-specific risk be diversified away by investing in both Bell Financial and Xero 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 Xero 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 Xero, you can compare the effects of market volatilities on Bell Financial and Xero 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 Xero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Financial and Xero.
Diversification Opportunities for Bell Financial and Xero
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bell and Xero is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bell Financial Group and Xero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xero 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 Xero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xero has no effect on the direction of Bell Financial i.e., Bell Financial and Xero go up and down completely randomly.
Pair Corralation between Bell Financial and Xero
Assuming the 90 days trading horizon Bell Financial Group is expected to generate 0.66 times more return on investment than Xero. However, Bell Financial Group is 1.52 times less risky than Xero. It trades about 0.1 of its potential returns per unit of risk. Xero is currently generating about 0.01 per unit of risk. If you would invest 131.00 in Bell Financial Group on October 11, 2024 and sell it today you would earn a total of 2.00 from holding Bell Financial Group or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bell Financial Group vs. Xero
Performance |
| Timeline |
| Bell Financial Group |
| Xero |
Bell Financial and Xero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Financial and Xero
The main advantage of trading using opposite Bell Financial and Xero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Financial position performs unexpectedly, Xero 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 Xero will offset losses from the drop in Xero's long position.| Bell Financial vs. Perseus Mining | Bell Financial vs. Aurelia Metals | Bell Financial vs. Centuria Industrial Reit | Bell Financial vs. Step One Clothing |
| Xero vs. Magellan Financial Group | Xero vs. Bell Financial Group | Xero vs. Bluescope Steel | Xero vs. Kkr Credit Income |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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