Correlation Between BSP Financial and Bell Financial
Can any of the company-specific risk be diversified away by investing in both BSP Financial and Bell 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 BSP Financial and Bell Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BSP Financial Group and Bell Financial Group, you can compare the effects of market volatilities on BSP Financial and Bell 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 BSP Financial with a short position of Bell Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Bell Financial.
Diversification Opportunities for BSP Financial and Bell Financial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between BSP and Bell is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Bell Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Financial Group and BSP 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 BSP Financial Group are associated (or correlated) with Bell Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Financial Group has no effect on the direction of BSP Financial i.e., BSP Financial and Bell Financial go up and down completely randomly.
Pair Corralation between BSP Financial and Bell Financial
Assuming the 90 days trading horizon BSP Financial is expected to generate 1.37 times less return on investment than Bell Financial. But when comparing it to its historical volatility, BSP Financial Group is 1.28 times less risky than Bell Financial. It trades about 0.13 of its potential returns per unit of risk. Bell Financial Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 126.00 in Bell Financial Group on September 13, 2024 and sell it today you would earn a total of 8.00 from holding Bell Financial Group or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSP Financial Group vs. Bell Financial Group
Performance |
| Timeline |
| BSP Financial Group |
| Bell Financial Group |
BSP Financial and Bell Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Bell Financial
The main advantage of trading using opposite BSP Financial and Bell Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial position performs unexpectedly, Bell 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 Bell Financial will offset losses from the drop in Bell Financial's long position.| BSP Financial vs. Stelar Metals | BSP Financial vs. Truscott Mining Corp | BSP Financial vs. Iron Road | BSP Financial vs. Falcon Metals |
| Bell Financial vs. Retail Food Group | Bell Financial vs. Fisher Paykel Healthcare | Bell Financial vs. Austco Healthcare | Bell Financial vs. Healthco Healthcare and |
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 Stocks Directory module to find actively traded stocks across global markets.
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