Correlation Between Globe Metals and Bell Financial
Can any of the company-specific risk be diversified away by investing in both Globe Metals 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 Globe Metals and Bell Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Metals Mining and Bell Financial Group, you can compare the effects of market volatilities on Globe Metals 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 Globe Metals with a short position of Bell Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Metals and Bell Financial.
Diversification Opportunities for Globe Metals and Bell Financial
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globe and Bell is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Globe Metals Mining 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 Globe Metals 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 Globe Metals Mining 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 Globe Metals i.e., Globe Metals and Bell Financial go up and down completely randomly.
Pair Corralation between Globe Metals and Bell Financial
Assuming the 90 days trading horizon Globe Metals Mining is expected to generate 3.16 times more return on investment than Bell Financial. However, Globe Metals is 3.16 times more volatile than Bell Financial Group. It trades about 0.04 of its potential returns per unit of risk. Bell Financial Group is currently generating about 0.06 per unit of risk. If you would invest 3.70 in Globe Metals Mining on September 15, 2024 and sell it today you would earn a total of 0.40 from holding Globe Metals Mining or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Metals Mining vs. Bell Financial Group
Performance |
| Timeline |
| Globe Metals Mining |
| Bell Financial Group |
Globe Metals and Bell Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Metals and Bell Financial
The main advantage of trading using opposite Globe Metals and Bell Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Metals 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.| Globe Metals vs. Dicker Data | Globe Metals vs. Lendlease Group | Globe Metals vs. Hansen Technologies | Globe Metals vs. Advanced Braking Technology |
| Bell Financial vs. National Australia Bank | Bell Financial vs. BSP Financial Group | Bell Financial vs. Globe Metals Mining | Bell Financial vs. Aspire Mining |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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