Correlation Between Bell Financial and FleetPartners

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

Diversification Opportunities for Bell Financial and FleetPartners

-0.3

Correlation Coefficient

Bell Financial  FleetPartners

Very good diversification

The 3 months correlation between Bell and FleetPartners is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bell Financial Group and FleetPartners Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FleetPartners Group 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 FleetPartners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FleetPartners Group has no effect on the direction of Bell Financial i.e., Bell Financial and FleetPartners go up and down completely randomly.

Pair Corralation between Bell Financial and FleetPartners

Assuming the 90 days trading horizon Bell Financial Group is expected to generate 1.0 times more return on investment than FleetPartners. However, Bell Financial Group is 1.0 times less risky than FleetPartners. It trades about 0.05 of its potential returns per unit of risk. FleetPartners Group is currently generating about -0.13 per unit of risk. If you would invest  128.00  in Bell Financial Group on October 7, 2024 and sell it today you would earn a total of  6.00  from holding Bell Financial Group or generate 4.69% 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.  FleetPartners Group

Bell Financial Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bell Financial Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Bell Financial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

FleetPartners Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FleetPartners Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bell Financial and FleetPartners

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

The idea behind Bell Financial Group and FleetPartners 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.