Correlation Between Bank of Queensland and Bell Financial
Can any of the company-specific risk be diversified away by investing in both Bank of Queensland 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 Bank of Queensland and Bell Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Queensland and Bell Financial Group, you can compare the effects of market volatilities on Bank of Queensland 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 Bank of Queensland with a short position of Bell Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Queensland and Bell Financial.
Diversification Opportunities for Bank of Queensland and Bell Financial
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Bell is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Queensland 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 Bank of Queensland 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 Bank of Queensland 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 Bank of Queensland i.e., Bank of Queensland and Bell Financial go up and down completely randomly.
Pair Corralation between Bank of Queensland and Bell Financial
Assuming the 90 days trading horizon Bank of Queensland is expected to under-perform the Bell Financial. But the stock apears to be less risky and, when comparing its historical volatility, Bank of Queensland is 8.37 times less risky than Bell Financial. The stock trades about -0.07 of its potential returns per unit of risk. The Bell Financial Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Bell Financial Group on September 4, 2024 and sell it today you would earn a total of 5.00 from holding Bell Financial Group or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Queensland vs. Bell Financial Group
Performance |
| Timeline |
| Bank of Queensland |
| Bell Financial Group |
Bank of Queensland and Bell Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Queensland and Bell Financial
The main advantage of trading using opposite Bank of Queensland and Bell Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Queensland 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.| Bank of Queensland vs. Mystate | Bank of Queensland vs. Truscott Mining Corp | Bank of Queensland vs. Australia and New | Bank of Queensland vs. Tabcorp Holdings |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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