Correlation Between Bill and BCB Bancorp

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

By analyzing existing cross correlation between Bill Com Holdings and BCB Bancorp, you can compare the effects of market volatilities on Bill and BCB Bancorp 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 Bill with a short position of BCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bill and BCB Bancorp.

Diversification Opportunities for Bill and BCB Bancorp

0.67

Correlation Coefficient

Bill  BCB Bancorp

Poor diversification

The 3 months correlation between Bill and BCB is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp and Bill 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 Bill Com Holdings are associated (or correlated) with BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of Bill i.e., Bill and BCB Bancorp go up and down completely randomly.

Pair Corralation between Bill and BCB Bancorp

Given the investment horizon of 90 days Bill Com Holdings is expected to under-perform the BCB Bancorp. In addition to that, Bill is 6.07 times more volatile than BCB Bancorp. It trades about -0.28 of its total potential returns per unit of risk. BCB Bancorp is currently generating about -0.18 per unit of volatility. If you would invest  1,067  in BCB Bancorp on December 2, 2024 and sell it today you would lose (54.00) from holding BCB Bancorp or give up 5.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Bill Com Holdings  vs.  BCB Bancorp

Bill Com Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bill Com Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

BCB Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days BCB Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bill and BCB Bancorp

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

The idea behind Bill Com Holdings and BCB Bancorp 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.

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.