Correlation Between BPS TECHNOLOGY and Silicon Craft

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

Diversification Opportunities for BPS TECHNOLOGY and Silicon Craft

0.45

Correlation Coefficient

BPS TECHNOLOGY  Silicon Craft

Very weak diversification

The 3 months correlation between BPS and Silicon is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding BPS TECHNOLOGY PUBLIC and Silicon Craft Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Craft Technology 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 Silicon Craft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Craft Technology has no effect on the direction of BPS TECHNOLOGY i.e., BPS TECHNOLOGY and Silicon Craft go up and down completely randomly.

Pair Corralation between BPS TECHNOLOGY and Silicon Craft

Assuming the 90 days trading horizon BPS TECHNOLOGY PUBLIC is expected to under-perform the Silicon Craft. But the stock apears to be less risky and, when comparing its historical volatility, BPS TECHNOLOGY PUBLIC is 1.05 times less risky than Silicon Craft. The stock trades about -0.09 of its potential returns per unit of risk. The Silicon Craft Technology is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  510.00  in Silicon Craft Technology on September 14, 2024 and sell it today you would lose (102.00) from holding Silicon Craft Technology or give up 20.0% of portfolio value over 90 days.

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

BPS TECHNOLOGY PUBLIC  vs.  Silicon Craft Technology

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 weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Silicon Craft Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silicon Craft Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with BPS TECHNOLOGY and Silicon Craft

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

The idea behind BPS TECHNOLOGY PUBLIC and Silicon Craft Technology 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.