Correlation Between Insignia Financial and Bell Financial
Can any of the company-specific risk be diversified away by investing in both Insignia 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 Insignia 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 Insignia Financial and Bell Financial Group, you can compare the effects of market volatilities on Insignia 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 Insignia Financial with a short position of Bell Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Financial and Bell Financial.
Diversification Opportunities for Insignia Financial and Bell Financial
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Insignia and Bell is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial 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 Insignia 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 Insignia Financial 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 Insignia Financial i.e., Insignia Financial and Bell Financial go up and down completely randomly.
Pair Corralation between Insignia Financial and Bell Financial
Assuming the 90 days trading horizon Insignia Financial is expected to generate 4.58 times more return on investment than Bell Financial. However, Insignia Financial is 4.58 times more volatile than Bell Financial Group. It trades about 0.33 of its potential returns per unit of risk. Bell Financial Group is currently generating about 0.11 per unit of risk. If you would invest 358.00 in Insignia Financial on October 23, 2024 and sell it today you would earn a total of 87.00 from holding Insignia Financial or generate 24.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 94.74% |
Values | Daily Returns |
Insignia Financial vs. Bell Financial Group
Performance |
Timeline |
Insignia Financial |
Bell Financial Group |
Insignia Financial and Bell Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Insignia Financial and Bell Financial
The main advantage of trading using opposite Insignia Financial and Bell Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia 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.Insignia Financial vs. Aneka Tambang Tbk | Insignia Financial vs. Commonwealth Bank of | Insignia Financial vs. Australia and New | Insignia Financial vs. ANZ Group Holdings |
Bell Financial vs. Westpac Banking | Bell Financial vs. National Australia Bank | Bell Financial vs. National Australia Bank | Bell Financial vs. National Australia Bank |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |