Correlation Between Capital Drilling and Bell Food
Can any of the company-specific risk be diversified away by investing in both Capital Drilling 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 Capital Drilling and Bell Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Drilling and Bell Food Group, you can compare the effects of market volatilities on Capital Drilling 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 Capital Drilling with a short position of Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Drilling and Bell Food.
Diversification Opportunities for Capital Drilling and Bell Food
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and Bell is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Capital Drilling 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 Capital Drilling 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 Capital Drilling 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 Capital Drilling i.e., Capital Drilling and Bell Food go up and down completely randomly.
Pair Corralation between Capital Drilling and Bell Food
Assuming the 90 days trading horizon Capital Drilling is expected to under-perform the Bell Food. In addition to that, Capital Drilling is 4.06 times more volatile than Bell Food Group. It trades about -0.04 of its total potential returns per unit of risk. Bell Food Group is currently generating about -0.05 per unit of volatility. If you would invest 26,500 in Bell Food Group on September 1, 2024 and sell it today you would lose (150.00) from holding Bell Food Group or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Drilling vs. Bell Food Group
Performance |
| Timeline |
| Capital Drilling |
| Bell Food Group |
Capital Drilling and Bell Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Drilling and Bell Food
The main advantage of trading using opposite Capital Drilling and Bell Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Drilling 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.| Capital Drilling vs. Zoom Video Communications | Capital Drilling vs. Endo International PLC | Capital Drilling vs. Diversified Energy | Capital Drilling vs. SANTANDER UK 10 |
| Bell Food vs. Odyssean Investment Trust | Bell Food vs. Flutter Entertainment PLC | Bell Food vs. New Residential Investment | Bell Food vs. Taylor Maritime Investments |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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