Correlation Between Bankers Investment and Bell Food

Can any of the company-specific risk be diversified away by investing in both Bankers Investment and Bell Food 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 Bankers Investment and Bell Food into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bankers Investment Trust and Bell Food Group, you can compare the effects of market volatilities on Bankers Investment and Bell Food 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 Bankers Investment with a short position of Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Bell Food.

Diversification Opportunities for Bankers Investment and Bell Food

0.01

Correlation Coefficient

Bankers Investment  Bell Food

Significant diversification

The 3 months correlation between Bankers and Bell is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Bell Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Food Group and Bankers Investment 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 Bankers Investment Trust are associated (or correlated) with Bell Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Food Group has no effect on the direction of Bankers Investment i.e., Bankers Investment and Bell Food go up and down completely randomly.

Pair Corralation between Bankers Investment and Bell Food

Assuming the 90 days trading horizon Bankers Investment Trust is expected to under-perform the Bell Food. But the fund apears to be less risky and, when comparing its historical volatility, Bankers Investment Trust is 1.28 times less risky than Bell Food. The fund trades about -0.04 of its potential returns per unit of risk. The Bell Food Group is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  26,150  in Bell Food Group on December 31, 2024 and sell it today you would lose (700.00) from holding Bell Food Group or give up 2.68% of portfolio value over 90 days.

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

Bankers Investment Trust  vs.  Bell Food Group

Bankers Investment Trust

Risk-Adjusted Performance

Very Weak

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

Bell Food Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bell Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bell Food 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 Bankers Investment and Bell Food

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

The idea behind Bankers Investment Trust and Bell Food 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.