Correlation Between Bell Financial and Flagship Investments

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

Diversification Opportunities for Bell Financial and Flagship Investments

0.29

Correlation Coefficient

Bell Financial  Flagship Investments

Modest diversification

The 3 months correlation between Bell and Flagship is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bell Financial Group and Flagship Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flagship Investments 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 Flagship Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flagship Investments has no effect on the direction of Bell Financial i.e., Bell Financial and Flagship Investments go up and down completely randomly.

Pair Corralation between Bell Financial and Flagship Investments

Assuming the 90 days trading horizon Bell Financial Group is expected to generate 1.08 times more return on investment than Flagship Investments. However, Bell Financial is 1.08 times more volatile than Flagship Investments. It trades about 0.12 of its potential returns per unit of risk. Flagship Investments is currently generating about 0.08 per unit of risk. If you would invest  124.00  in Bell Financial Group on October 7, 2024 and sell it today you would earn a total of  10.00  from holding Bell Financial Group or generate 8.06% return on investment over 90 days.

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

Bell Financial Group  vs.  Flagship Investments

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Flagship Investments

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Flagship Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Flagship Investments may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bell Financial and Flagship Investments

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

The idea behind Bell Financial Group and Flagship Investments 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.