Correlation Between Bendigo and Rural Funds

Can any of the company-specific risk be diversified away by investing in both Bendigo and Rural Funds 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 Rural Funds 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 Rural Funds Group, you can compare the effects of market volatilities on Bendigo and Rural Funds 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 Rural Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bendigo and Rural Funds.

Diversification Opportunities for Bendigo and Rural Funds

-0.74

Correlation Coefficient

Bendigo  Rural Funds

Pay attention - limited upside

The 3 months correlation between Bendigo and Rural is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bendigo And Adelaide and Rural Funds Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rural Funds Group 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 Rural Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rural Funds Group has no effect on the direction of Bendigo i.e., Bendigo and Rural Funds go up and down completely randomly.

Pair Corralation between Bendigo and Rural Funds

Assuming the 90 days trading horizon Bendigo And Adelaide is expected to generate 1.25 times more return on investment than Rural Funds. However, Bendigo is 1.25 times more volatile than Rural Funds Group. It trades about 0.14 of its potential returns per unit of risk. Rural Funds Group is currently generating about -0.21 per unit of risk. If you would invest  1,190  in Bendigo And Adelaide on September 26, 2024 and sell it today you would earn a total of  128.00  from holding Bendigo And Adelaide or generate 10.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Bendigo And Adelaide  vs.  Rural Funds Group

Bendigo And Adelaide

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bendigo And Adelaide are ranked lower than 11 (%) 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.

Rural Funds Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rural Funds Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Bendigo and Rural Funds

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

The idea behind Bendigo And Adelaide and Rural Funds Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.