Correlation Between Bendigo and Group 6

Can any of the company-specific risk be diversified away by investing in both Bendigo and Group 6 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 Group 6 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 Group 6 Metals, you can compare the effects of market volatilities on Bendigo and Group 6 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 Group 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bendigo and Group 6.

Diversification Opportunities for Bendigo and Group 6

0.11

Correlation Coefficient

Bendigo  Group 6

Average diversification

The 3 months correlation between Bendigo and Group is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bendigo And Adelaide and Group 6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 6 Metals 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 Group 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 6 Metals has no effect on the direction of Bendigo i.e., Bendigo and Group 6 go up and down completely randomly.

Pair Corralation between Bendigo and Group 6

Assuming the 90 days trading horizon Bendigo And Adelaide is expected to generate 0.59 times more return on investment than Group 6. However, Bendigo And Adelaide is 1.71 times less risky than Group 6. It trades about 0.14 of its potential returns per unit of risk. Group 6 Metals is currently generating about 0.01 per unit of risk. If you would invest  1,217  in Bendigo And Adelaide on September 12, 2024 and sell it today you would earn a total of  113.00  from holding Bendigo And Adelaide or generate 9.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bendigo And Adelaide  vs.  Group 6 Metals

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 uncertain basic indicators, Bendigo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Group 6 Metals

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Group 6 Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Group 6 is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bendigo and Group 6

The main advantage of trading using opposite Bendigo and Group 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bendigo position performs unexpectedly, Group 6 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 Group 6 will offset losses from the drop in Group 6's long position.

The idea behind Bendigo And Adelaide and Group 6 Metals 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.