Correlation Between Central Asia and Bell Food
Can any of the company-specific risk be diversified away by investing in both Central Asia and Bell Food 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 Central Asia and Bell Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Asia Metals and Bell Food Group, you can compare the effects of market volatilities on Central Asia and Bell Food 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 Central Asia with a short position of Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Asia and Bell Food.
Diversification Opportunities for Central Asia and Bell Food
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Central and Bell is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals and Bell Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Food Group and Central Asia 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 Central Asia Metals are associated (or correlated) with Bell Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Food Group has no effect on the direction of Central Asia i.e., Central Asia and Bell Food go up and down completely randomly.
Pair Corralation between Central Asia and Bell Food
Assuming the 90 days trading horizon Central Asia Metals is expected to under-perform the Bell Food. In addition to that, Central Asia is 1.7 times more volatile than Bell Food Group. It trades about -0.02 of its total potential returns per unit of risk. Bell Food Group is currently generating about 0.03 per unit of volatility. If you would invest 23,748 in Bell Food Group on September 14, 2024 and sell it today you would earn a total of 2,752 from holding Bell Food Group or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Central Asia Metals vs. Bell Food Group
Performance |
| Timeline |
| Central Asia Metals |
| Bell Food Group |
Central Asia and Bell Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Asia and Bell Food
The main advantage of trading using opposite Central Asia and Bell Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Asia position performs unexpectedly, Bell Food 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 Food will offset losses from the drop in Bell Food's long position.| Central Asia vs. Empire Metals Limited | Central Asia vs. Celebrus Technologies plc | Central Asia vs. Made Tech Group | Central Asia vs. Albion Technology General |
| Bell Food vs. Europa Metals | Bell Food vs. Silvercorp Metals | Bell Food vs. Lundin Mining Corp | Bell Food vs. Central Asia Metals |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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