Correlation Between Advanced Information and BPS TECHNOLOGY

Can any of the company-specific risk be diversified away by investing in both Advanced Information and BPS TECHNOLOGY 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 Advanced Information and BPS TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advanced Information Technology and BPS TECHNOLOGY PUBLIC, you can compare the effects of market volatilities on Advanced Information and BPS TECHNOLOGY 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 Advanced Information with a short position of BPS TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Information and BPS TECHNOLOGY.

Diversification Opportunities for Advanced Information and BPS TECHNOLOGY

-0.42

Correlation Coefficient

Advanced Information  BPS TECHNOLOGY

Very good diversification

The 3 months correlation between Advanced and BPS is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Information Technolog and BPS TECHNOLOGY PUBLIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BPS TECHNOLOGY PUBLIC and Advanced Information 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 Advanced Information Technology are associated (or correlated) with BPS TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BPS TECHNOLOGY PUBLIC has no effect on the direction of Advanced Information i.e., Advanced Information and BPS TECHNOLOGY go up and down completely randomly.

Pair Corralation between Advanced Information and BPS TECHNOLOGY

Assuming the 90 days trading horizon Advanced Information Technology is expected to generate 0.45 times more return on investment than BPS TECHNOLOGY. However, Advanced Information Technology is 2.21 times less risky than BPS TECHNOLOGY. It trades about 0.03 of its potential returns per unit of risk. BPS TECHNOLOGY PUBLIC is currently generating about -0.05 per unit of risk. If you would invest  422.00  in Advanced Information Technology on September 13, 2024 and sell it today you would earn a total of  8.00  from holding Advanced Information Technology or generate 1.9% return on investment over 90 days.

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

Advanced Information Technolog  vs.  BPS TECHNOLOGY PUBLIC

Advanced Information

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Information Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Advanced Information is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

BPS TECHNOLOGY PUBLIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BPS TECHNOLOGY PUBLIC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Advanced Information and BPS TECHNOLOGY

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

The idea behind Advanced Information Technology and BPS TECHNOLOGY PUBLIC 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.