Correlation Between Bourque Indts and Spectrum Technology

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

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

Diversification Opportunities for Bourque Indts and Spectrum Technology

0.0

Correlation Coefficient

Bourque Indts  Spectrum Technology

Pay attention - limited upside

The 3 months correlation between Bourque and Spectrum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bourque Indts and Spectrum Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Technology and Bourque Indts 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 Bourque Indts are associated (or correlated) with Spectrum Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Technology has no effect on the direction of Bourque Indts i.e., Bourque Indts and Spectrum Technology go up and down completely randomly.

Pair Corralation between Bourque Indts and Spectrum Technology

If you would invest (100.00) in Spectrum Technology on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Spectrum Technology or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bourque Indts  vs.  Spectrum Technology

Bourque Indts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bourque Indts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Bourque Indts is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Spectrum Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spectrum Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Spectrum Technology is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bourque Indts and Spectrum Technology

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

The idea behind Bourque Indts and Spectrum Technology 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.