Correlation Between BPS TECHNOLOGY and AddTech Hub
Can any of the company-specific risk be diversified away by investing in both BPS TECHNOLOGY and AddTech Hub 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 BPS TECHNOLOGY and AddTech Hub into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BPS TECHNOLOGY PUBLIC and AddTech Hub Public, you can compare the effects of market volatilities on BPS TECHNOLOGY and AddTech Hub 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 BPS TECHNOLOGY with a short position of AddTech Hub. Check out your portfolio center. Please also check ongoing floating volatility patterns of BPS TECHNOLOGY and AddTech Hub.
Diversification Opportunities for BPS TECHNOLOGY and AddTech Hub
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BPS and AddTech is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BPS TECHNOLOGY PUBLIC and AddTech Hub Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AddTech Hub Public and BPS TECHNOLOGY 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 BPS TECHNOLOGY PUBLIC are associated (or correlated) with AddTech Hub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AddTech Hub Public has no effect on the direction of BPS TECHNOLOGY i.e., BPS TECHNOLOGY and AddTech Hub go up and down completely randomly.
Pair Corralation between BPS TECHNOLOGY and AddTech Hub
Assuming the 90 days trading horizon BPS TECHNOLOGY PUBLIC is expected to under-perform the AddTech Hub. In addition to that, BPS TECHNOLOGY is 3.01 times more volatile than AddTech Hub Public. It trades about -0.05 of its total potential returns per unit of risk. AddTech Hub Public is currently generating about -0.04 per unit of volatility. If you would invest 598.00 in AddTech Hub Public on September 14, 2024 and sell it today you would lose (122.00) from holding AddTech Hub Public or give up 20.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 69.58% |
Values | Daily Returns |
BPS TECHNOLOGY PUBLIC vs. AddTech Hub Public
Performance |
Timeline |
BPS TECHNOLOGY PUBLIC |
AddTech Hub Public |
BPS TECHNOLOGY and AddTech Hub Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BPS TECHNOLOGY and AddTech Hub
The main advantage of trading using opposite BPS TECHNOLOGY and AddTech Hub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BPS TECHNOLOGY position performs unexpectedly, AddTech Hub 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 AddTech Hub will offset losses from the drop in AddTech Hub's long position.BPS TECHNOLOGY vs. Delta Electronics Public | BPS TECHNOLOGY vs. Delta Electronics Public | BPS TECHNOLOGY vs. Airports of Thailand | BPS TECHNOLOGY vs. Airports of Thailand |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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