Correlation Between Bendigo and Nutritional Growth

Can any of the company-specific risk be diversified away by investing in both Bendigo and Nutritional Growth 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 Bendigo and Nutritional Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bendigo And Adelaide and Nutritional Growth Solutions, you can compare the effects of market volatilities on Bendigo and Nutritional Growth 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 Bendigo with a short position of Nutritional Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bendigo and Nutritional Growth.

Diversification Opportunities for Bendigo and Nutritional Growth

0.86

Correlation Coefficient

Bendigo  Nutritional Growth

Very poor diversification

The 3 months correlation between Bendigo and Nutritional is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bendigo And Adelaide and Nutritional Growth Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutritional Growth and Bendigo 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 Bendigo And Adelaide are associated (or correlated) with Nutritional Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutritional Growth has no effect on the direction of Bendigo i.e., Bendigo and Nutritional Growth go up and down completely randomly.

Pair Corralation between Bendigo and Nutritional Growth

Assuming the 90 days trading horizon Bendigo is expected to generate 7.56 times less return on investment than Nutritional Growth. But when comparing it to its historical volatility, Bendigo And Adelaide is 4.48 times less risky than Nutritional Growth. It trades about 0.13 of its potential returns per unit of risk. Nutritional Growth Solutions is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2.80  in Nutritional Growth Solutions on September 25, 2024 and sell it today you would earn a total of  1.70  from holding Nutritional Growth Solutions or generate 60.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	75.0%
Values	Daily Returns

Bendigo And Adelaide  vs.  Nutritional Growth Solutions

Bendigo And Adelaide

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bendigo And Adelaide are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Bendigo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nutritional Growth

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nutritional Growth Solutions are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nutritional Growth unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bendigo and Nutritional Growth

The main advantage of trading using opposite Bendigo and Nutritional Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bendigo position performs unexpectedly, Nutritional Growth 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 Nutritional Growth will offset losses from the drop in Nutritional Growth's long position.

The idea behind Bendigo And Adelaide and Nutritional Growth Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..