Correlation Between Lendinvest PLC and Bell Food
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC 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 Lendinvest PLC and Bell Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Bell Food Group, you can compare the effects of market volatilities on Lendinvest PLC 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 Lendinvest PLC with a short position of Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Bell Food.
Diversification Opportunities for Lendinvest PLC and Bell Food
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lendinvest and Bell is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC i.e., Lendinvest PLC and Bell Food go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Bell Food
Assuming the 90 days trading horizon Lendinvest PLC is expected to under-perform the Bell Food. In addition to that, Lendinvest PLC is 3.21 times more volatile than Bell Food Group. It trades about -0.06 of its total potential returns per unit of risk. Bell Food Group is currently generating about -0.01 per unit of volatility. If you would invest 26,650 in Bell Food Group on August 29, 2024 and sell it today you would lose (50.00) from holding Bell Food Group or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendinvest PLC vs. Bell Food Group
Performance |
| Timeline |
| Lendinvest PLC |
| Bell Food Group |
Lendinvest PLC and Bell Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Bell Food
The main advantage of trading using opposite Lendinvest PLC and Bell Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC 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.| Lendinvest PLC vs. Toyota Motor Corp | Lendinvest PLC vs. Neometals | Lendinvest PLC vs. Coor Service Management | Lendinvest PLC vs. Albion Technology General |
| Bell Food vs. Lendinvest PLC | Bell Food vs. Neometals | Bell Food vs. Coor Service Management | Bell Food vs. Albion Technology General |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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