Correlation Between Bell Food and Frontier Developments

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

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

Diversification Opportunities for Bell Food and Frontier Developments

-0.85

Correlation Coefficient

Bell Food  Frontier Developments

Pay attention - limited upside

The 3 months correlation between Bell and Frontier is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bell Food Group and Frontier Developments Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Developments Plc and Bell Food 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 Food Group are associated (or correlated) with Frontier Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Developments Plc has no effect on the direction of Bell Food i.e., Bell Food and Frontier Developments go up and down completely randomly.

Pair Corralation between Bell Food and Frontier Developments

Assuming the 90 days trading horizon Bell Food Group is expected to under-perform the Frontier Developments. But the stock apears to be less risky and, when comparing its historical volatility, Bell Food Group is 3.64 times less risky than Frontier Developments. The stock trades about -0.06 of its potential returns per unit of risk. The Frontier Developments Plc is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  19,500  in Frontier Developments Plc on April 24, 2025 and sell it today you would earn a total of  17,850  from holding Frontier Developments Plc or generate 91.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

Bell Food Group  vs.  Frontier Developments Plc

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.

Frontier Developments Plc

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Frontier Developments Plc are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Frontier Developments unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bell Food and Frontier Developments

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

The idea behind Bell Food Group and Frontier Developments Plc 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.