Correlation Between BC Technology and AMTD Digital

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

By analyzing existing cross correlation between BC Technology Group and AMTD Digital, you can compare the effects of market volatilities on BC Technology and AMTD Digital 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 BC Technology with a short position of AMTD Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BC Technology and AMTD Digital.

Diversification Opportunities for BC Technology and AMTD Digital

-0.72

Correlation Coefficient

BC Technology  AMTD Digital

Pay attention - limited upside

The 3 months correlation between BCTCF and AMTD is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BC Technology Group and AMTD Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMTD Digital and BC 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 BC Technology Group are associated (or correlated) with AMTD Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMTD Digital has no effect on the direction of BC Technology i.e., BC Technology and AMTD Digital go up and down completely randomly.

Pair Corralation between BC Technology and AMTD Digital

If you would invest  107.00  in BC Technology Group on October 10, 2024 and sell it today you would earn a total of  0.00  from holding BC Technology Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

BC Technology Group  vs.  AMTD Digital

BC Technology Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BC Technology Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, BC Technology reported solid returns over the last few months and may actually be approaching a breakup point.

AMTD Digital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMTD Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with BC Technology and AMTD Digital

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

The idea behind BC Technology Group and AMTD Digital 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.