Correlation Between EPlus and Bm Technologies
Can any of the company-specific risk be diversified away by investing in both EPlus 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 EPlus and Bm Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ePlus inc and Bm Technologies, you can compare the effects of market volatilities on EPlus 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 EPlus with a short position of Bm Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPlus and Bm Technologies.
Diversification Opportunities for EPlus and Bm Technologies
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EPlus and BMTX is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding ePlus inc and Bm Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bm Technologies and EPlus 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 ePlus inc 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 EPlus i.e., EPlus and Bm Technologies go up and down completely randomly.
Pair Corralation between EPlus and Bm Technologies
Given the investment horizon of 90 days ePlus inc is expected to generate 1.7 times more return on investment than Bm Technologies. However, EPlus is 1.7 times more volatile than Bm Technologies. It trades about 0.63 of its potential returns per unit of risk. Bm Technologies is currently generating about 0.37 per unit of risk. If you would invest 7,370 in ePlus inc on October 23, 2024 and sell it today you would earn a total of 636.00 from holding ePlus inc or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ePlus inc vs. Bm Technologies
Performance |
| Timeline |
| ePlus inc |
| Bm Technologies |
EPlus and Bm Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPlus and Bm Technologies
The main advantage of trading using opposite EPlus and Bm Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPlus 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.The idea behind ePlus inc and Bm Technologies 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.| Bm Technologies vs. Where Food Comes | Bm Technologies vs. eGain | Bm Technologies vs. Research Solutions | Bm Technologies vs. Infobird Co |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |