Correlation Between BTS Group and BGrimm Power

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

By analyzing existing cross correlation between BTS Group Holdings and BGrimm Power Public, you can compare the effects of market volatilities on BTS Group and BGrimm Power 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 BTS Group with a short position of BGrimm Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTS Group and BGrimm Power.

Diversification Opportunities for BTS Group and BGrimm Power

-0.78

Correlation Coefficient

BTS Group  BGrimm Power

Pay attention - limited upside

The 3 months correlation between BTS and BGrimm is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding BTS Group Holdings and BGrimm Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGrimm Power Public and BTS Group 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 BTS Group Holdings are associated (or correlated) with BGrimm Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGrimm Power Public has no effect on the direction of BTS Group i.e., BTS Group and BGrimm Power go up and down completely randomly.

Pair Corralation between BTS Group and BGrimm Power

Assuming the 90 days trading horizon BTS Group Holdings is expected to generate 1.0 times more return on investment than BGrimm Power. However, BTS Group is 1.0 times more volatile than BGrimm Power Public. It trades about -0.04 of its potential returns per unit of risk. BGrimm Power Public is currently generating about -0.4 per unit of risk. If you would invest  580.00  in BTS Group Holdings on October 12, 2024 and sell it today you would lose (15.00) from holding BTS Group Holdings or give up 2.59% of portfolio value over 90 days.

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

BTS Group Holdings  vs.  BGrimm Power Public

BTS Group Holdings

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BTS Group Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, BTS Group disclosed solid returns over the last few months and may actually be approaching a breakup point.

BGrimm Power Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BGrimm Power 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 fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with BTS Group and BGrimm Power

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

The idea behind BTS Group Holdings and BGrimm Power 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.