Correlation Between BMTC and TUT Fitness

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

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

Diversification Opportunities for BMTC and TUT Fitness

0.0

Correlation Coefficient

BMTC  TUT Fitness

Pay attention - limited upside

The 3 months correlation between BMTC and TUT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BMTC Group and TUT Fitness Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TUT Fitness Group and BMTC 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 BMTC Group are associated (or correlated) with TUT Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TUT Fitness Group has no effect on the direction of BMTC i.e., BMTC and TUT Fitness go up and down completely randomly.

Pair Corralation between BMTC and TUT Fitness

If you would invest  8.00  in TUT Fitness Group on September 14, 2024 and sell it today you would earn a total of  0.00  from holding TUT Fitness Group or generate 0.0% return on investment over 90 days.

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

BMTC Group  vs.  TUT Fitness Group

BMTC Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BMTC Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, BMTC is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

TUT Fitness Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TUT Fitness Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, TUT Fitness is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with BMTC and TUT Fitness

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

The idea behind BMTC Group and TUT Fitness 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.