Correlation Between Bce and Birchtech Corp

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

By analyzing existing cross correlation between Bce Inc Pref and Birchtech Corp, you can compare the effects of market volatilities on Bce and Birchtech Corp 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 Bce with a short position of Birchtech Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bce and Birchtech Corp.

Diversification Opportunities for Bce and Birchtech Corp

0.16

Correlation Coefficient

Bce  Birchtech Corp

Average diversification

The 3 months correlation between Bce and Birchtech is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bce Inc Pref and Birchtech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchtech Corp and Bce 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 Bce Inc Pref are associated (or correlated) with Birchtech Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchtech Corp has no effect on the direction of Bce i.e., Bce and Birchtech Corp go up and down completely randomly.

Pair Corralation between Bce and Birchtech Corp

Assuming the 90 days trading horizon Bce Inc Pref is expected to generate 0.15 times more return on investment than Birchtech Corp. However, Bce Inc Pref is 6.58 times less risky than Birchtech Corp. It trades about 0.17 of its potential returns per unit of risk. Birchtech Corp is currently generating about 0.01 per unit of risk. If you would invest  1,545  in Bce Inc Pref on December 22, 2024 and sell it today you would earn a total of  115.00  from holding Bce Inc Pref or generate 7.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Bce Inc Pref  vs.  Birchtech Corp

Bce Inc Pref

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bce Inc Pref are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Bce may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Birchtech Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Birchtech Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Birchtech Corp is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bce and Birchtech Corp

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

The idea behind Bce Inc Pref and Birchtech Corp 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 CEOs Directory module to screen CEOs from public companies around the world.