Correlation Between Bell Financial and Centuria Industrial
Can any of the company-specific risk be diversified away by investing in both Bell Financial and Centuria Industrial 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 Bell Financial and Centuria Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Financial Group and Centuria Industrial Reit, you can compare the effects of market volatilities on Bell Financial and Centuria Industrial 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 Bell Financial with a short position of Centuria Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Financial and Centuria Industrial.
Diversification Opportunities for Bell Financial and Centuria Industrial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bell and Centuria is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bell Financial Group and Centuria Industrial Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centuria Industrial Reit and Bell 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 Bell Financial Group are associated (or correlated) with Centuria Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centuria Industrial Reit has no effect on the direction of Bell Financial i.e., Bell Financial and Centuria Industrial go up and down completely randomly.
Pair Corralation between Bell Financial and Centuria Industrial
Assuming the 90 days trading horizon Bell Financial Group is expected to generate 2.28 times more return on investment than Centuria Industrial. However, Bell Financial is 2.28 times more volatile than Centuria Industrial Reit. It trades about 0.02 of its potential returns per unit of risk. Centuria Industrial Reit is currently generating about -0.25 per unit of risk. If you would invest 132.00 in Bell Financial Group on September 25, 2024 and sell it today you would earn a total of 2.00 from holding Bell Financial Group or generate 1.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Bell Financial Group vs. Centuria Industrial Reit
Performance |
Timeline |
Bell Financial Group |
Centuria Industrial Reit |
Bell Financial and Centuria Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bell Financial and Centuria Industrial
The main advantage of trading using opposite Bell Financial and Centuria Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Financial position performs unexpectedly, Centuria Industrial 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 Centuria Industrial will offset losses from the drop in Centuria Industrial's long position.Bell Financial vs. Aussie Broadband | Bell Financial vs. Falcon Metals | Bell Financial vs. Perseus Mining | Bell Financial vs. Collins Foods |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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