Correlation Between Intouch Holdings and BPS TECHNOLOGY

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

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

Diversification Opportunities for Intouch Holdings and BPS TECHNOLOGY

-0.39

Correlation Coefficient

Intouch Holdings  BPS TECHNOLOGY

Very good diversification

The 3 months correlation between Intouch and BPS is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Intouch Holdings 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 Intouch Holdings 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 Intouch Holdings 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 Intouch Holdings i.e., Intouch Holdings and BPS TECHNOLOGY go up and down completely randomly.

Pair Corralation between Intouch Holdings and BPS TECHNOLOGY

Assuming the 90 days trading horizon Intouch Holdings Public is expected to under-perform the BPS TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, Intouch Holdings Public is 1.07 times less risky than BPS TECHNOLOGY. The stock trades about -0.07 of its potential returns per unit of risk. The BPS TECHNOLOGY PUBLIC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  50.00  in BPS TECHNOLOGY PUBLIC on December 28, 2024 and sell it today you would earn a total of  6.00  from holding BPS TECHNOLOGY PUBLIC or generate 12.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.94%
Values	Daily Returns

Intouch Holdings Public  vs.  BPS TECHNOLOGY PUBLIC

Intouch Holdings Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intouch Holdings Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

BPS TECHNOLOGY PUBLIC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BPS TECHNOLOGY PUBLIC are ranked lower than 6 (%) 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.

Pair Trading with Intouch Holdings and BPS TECHNOLOGY

The main advantage of trading using opposite Intouch Holdings and BPS TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intouch Holdings 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 Intouch Holdings 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.