Correlation Between Bell Financial and Beach Energy

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

Diversification Opportunities for Bell Financial and Beach Energy

0.0

Correlation Coefficient

Bell Financial  Beach Energy

Pay attention - limited upside

The 3 months correlation between Bell and Beach is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bell Financial Group and Beach Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beach Energy 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 Beach Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beach Energy has no effect on the direction of Bell Financial i.e., Bell Financial and Beach Energy go up and down completely randomly.

Pair Corralation between Bell Financial and Beach Energy

If you would invest  133.00  in Bell Financial Group on October 8, 2024 and sell it today you would earn a total of  1.00  from holding Bell Financial Group or generate 0.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

Bell Financial Group  vs.  Beach Energy

Bell Financial Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bell Financial Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Bell Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Beach Energy

Risk-Adjusted Performance

0 of 100

OK

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

Pair Trading with Bell Financial and Beach Energy

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

The idea behind Bell Financial Group and Beach Energy 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.