Correlation Between Sparx Technology and BCM Resources
Can any of the company-specific risk be diversified away by investing in both Sparx Technology 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 Sparx Technology and BCM Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparx Technology and BCM Resources Corp, you can compare the effects of market volatilities on Sparx Technology 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 Sparx Technology with a short position of BCM Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparx Technology and BCM Resources.
Diversification Opportunities for Sparx Technology and BCM Resources
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sparx and BCM is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sparx Technology and BCM Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCM Resources Corp and Sparx 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 Sparx Technology 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 Corp has no effect on the direction of Sparx Technology i.e., Sparx Technology and BCM Resources go up and down completely randomly.
Pair Corralation between Sparx Technology and BCM Resources
Assuming the 90 days trading horizon Sparx Technology is expected to generate 1.33 times less return on investment than BCM Resources. But when comparing it to its historical volatility, Sparx Technology is 3.69 times less risky than BCM Resources. It trades about 0.29 of its potential returns per unit of risk. BCM Resources Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4.00 in BCM Resources Corp on September 18, 2024 and sell it today you would earn a total of 0.50 from holding BCM Resources Corp or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sparx Technology vs. BCM Resources Corp
Performance |
| Timeline |
| Sparx Technology |
| BCM Resources Corp |
Sparx Technology and BCM Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparx Technology and BCM Resources
The main advantage of trading using opposite Sparx Technology and BCM Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparx Technology 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.| Sparx Technology vs. Millennium Silver Corp | Sparx Technology vs. Nicola Mining | Sparx Technology vs. Endeavour Silver Corp | Sparx Technology vs. Overactive Media Corp |
| BCM Resources vs. Xtract One Technologies | BCM Resources vs. Firan Technology Group | BCM Resources vs. Bip Investment Corp | BCM Resources vs. Solid Impact Investments |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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