Correlation Between Halcyon Technology and BPS TECHNOLOGY

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

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

Diversification Opportunities for Halcyon Technology and BPS TECHNOLOGY

0.68

Correlation Coefficient

Halcyon Technology  BPS TECHNOLOGY

Poor diversification

The 3 months correlation between Halcyon and BPS is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Halcyon Technology Public and BPS TECHNOLOGY PUBLIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BPS TECHNOLOGY PUBLIC and Halcyon 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 Halcyon Technology Public are associated (or correlated) with BPS TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BPS TECHNOLOGY PUBLIC has no effect on the direction of Halcyon Technology i.e., Halcyon Technology and BPS TECHNOLOGY go up and down completely randomly.

Pair Corralation between Halcyon Technology and BPS TECHNOLOGY

Assuming the 90 days trading horizon Halcyon Technology Public is expected to under-perform the BPS TECHNOLOGY. In addition to that, Halcyon Technology is 1.04 times more volatile than BPS TECHNOLOGY PUBLIC. It trades about -0.13 of its total potential returns per unit of risk. BPS TECHNOLOGY PUBLIC is currently generating about -0.03 per unit of volatility. If you would invest  53.00  in BPS TECHNOLOGY PUBLIC on December 3, 2024 and sell it today you would lose (4.00) from holding BPS TECHNOLOGY PUBLIC or give up 7.55% of portfolio value over 90 days.

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

Halcyon Technology Public  vs.  BPS TECHNOLOGY PUBLIC

Halcyon Technology Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Halcyon Technology 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

BPS TECHNOLOGY PUBLIC

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Halcyon Technology and BPS TECHNOLOGY

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

The idea behind Halcyon Technology Public and BPS TECHNOLOGY 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.