Correlation Between BPS TECHNOLOGY and Lease IT

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

By analyzing existing cross correlation between BPS TECHNOLOGY PUBLIC and Lease IT Public, you can compare the effects of market volatilities on BPS TECHNOLOGY and Lease IT 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 BPS TECHNOLOGY with a short position of Lease IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of BPS TECHNOLOGY and Lease IT.

Diversification Opportunities for BPS TECHNOLOGY and Lease IT

-0.28

Correlation Coefficient

BPS TECHNOLOGY  Lease IT

Very good diversification

The 3 months correlation between BPS and Lease is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding BPS TECHNOLOGY PUBLIC and Lease IT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lease IT Public and BPS 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 BPS TECHNOLOGY PUBLIC are associated (or correlated) with Lease IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lease IT Public has no effect on the direction of BPS TECHNOLOGY i.e., BPS TECHNOLOGY and Lease IT go up and down completely randomly.

Pair Corralation between BPS TECHNOLOGY and Lease IT

Assuming the 90 days trading horizon BPS TECHNOLOGY PUBLIC is expected to generate 0.5 times more return on investment than Lease IT. However, BPS TECHNOLOGY PUBLIC is 2.0 times less risky than Lease IT. It trades about 0.1 of its potential returns per unit of risk. Lease IT Public is currently generating about -0.1 per unit of risk. If you would invest  50.00  in BPS TECHNOLOGY PUBLIC on December 28, 2024 and sell it today you would earn a total of  7.00  from holding BPS TECHNOLOGY PUBLIC or generate 14.0% return on investment over 90 days.

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

BPS TECHNOLOGY PUBLIC  vs.  Lease IT Public

BPS TECHNOLOGY PUBLIC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BPS TECHNOLOGY PUBLIC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, BPS TECHNOLOGY disclosed solid returns over the last few months and may actually be approaching a breakup point.

Lease IT Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lease IT Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic 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.

Pair Trading with BPS TECHNOLOGY and Lease IT

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

The idea behind BPS TECHNOLOGY PUBLIC and Lease IT Public 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 Stocks Directory module to find actively traded stocks across global markets.