Correlation Between NYSE Composite and Bm Technologies
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Bm Technologies 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 NYSE Composite and Bm Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Bm Technologies, you can compare the effects of market volatilities on NYSE Composite and Bm Technologies 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 NYSE Composite with a short position of Bm Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Bm Technologies.
Diversification Opportunities for NYSE Composite and Bm Technologies
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and BMTX is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Bm Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bm Technologies and NYSE Composite 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 NYSE Composite are associated (or correlated) with Bm Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bm Technologies has no effect on the direction of NYSE Composite i.e., NYSE Composite and Bm Technologies go up and down completely randomly.
Pair Corralation between NYSE Composite and Bm Technologies
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.9 times more return on investment than Bm Technologies. However, NYSE Composite is 1.9 times more volatile than Bm Technologies. It trades about 0.24 of its potential returns per unit of risk. Bm Technologies is currently generating about 0.08 per unit of risk. If you would invest 1,945,627 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 66,718 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Bm Technologies
Performance |
| Timeline |
NYSE Composite and Bm Technologies Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Bm Technologies
Pair trading matchups for Bm Technologies
Pair Trading with NYSE Composite and Bm Technologies
The main advantage of trading using opposite NYSE Composite and Bm Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Bm Technologies 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 Bm Technologies will offset losses from the drop in Bm Technologies' long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Bm Technologies vs. OLB Group | Bm Technologies vs. Friendable | Bm Technologies vs. Trust Stamp | Bm Technologies vs. KwikClick |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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