Correlation Between Applied Blockchain and BCM Resources
Can any of the company-specific risk be diversified away by investing in both Applied Blockchain and BCM Resources 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 Applied Blockchain and BCM Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Blockchain and BCM Resources, you can compare the effects of market volatilities on Applied Blockchain and BCM Resources 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 Applied Blockchain with a short position of BCM Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Blockchain and BCM Resources.
Diversification Opportunities for Applied Blockchain and BCM Resources
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Applied and BCM is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain and BCM Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCM Resources and Applied Blockchain 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 Applied Blockchain are associated (or correlated) with BCM Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCM Resources has no effect on the direction of Applied Blockchain i.e., Applied Blockchain and BCM Resources go up and down completely randomly.
Pair Corralation between Applied Blockchain and BCM Resources
Given the investment horizon of 90 days Applied Blockchain is expected to generate 1.1 times less return on investment than BCM Resources. But when comparing it to its historical volatility, Applied Blockchain is 1.07 times less risky than BCM Resources. It trades about 0.16 of its potential returns per unit of risk. BCM Resources is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2.00 in BCM Resources on August 29, 2024 and sell it today you would earn a total of 0.50 from holding BCM Resources or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Blockchain vs. BCM Resources
Performance |
| Timeline |
| Applied Blockchain |
| BCM Resources |
Applied Blockchain and BCM Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Blockchain and BCM Resources
The main advantage of trading using opposite Applied Blockchain and BCM Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Blockchain position performs unexpectedly, BCM Resources 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 BCM Resources will offset losses from the drop in BCM Resources' long position.| Applied Blockchain vs. Magic Empire Global | Applied Blockchain vs. Zhong Yang Financial | Applied Blockchain vs. Netcapital | Applied Blockchain vs. Lazard |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |