Correlation Between NeoMedia Technologies and BHPA

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

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

Diversification Opportunities for NeoMedia Technologies and BHPA

0.0

Correlation Coefficient

NeoMedia Technologies  BHPA

Pay attention - limited upside

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

Pair Corralation between NeoMedia Technologies and BHPA

If you would invest  0.20  in BHPA Inc on November 29, 2024 and sell it today you would earn a total of  0.10  from holding BHPA Inc or generate 50.0% return on investment over 90 days.

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

NeoMedia Technologies  vs.  BHPA Inc

NeoMedia Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days NeoMedia Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, NeoMedia Technologies is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

BHPA Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days BHPA Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat fragile basic indicators, BHPA may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with NeoMedia Technologies and BHPA

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

The idea behind NeoMedia Technologies and BHPA Inc 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 Global Correlations module to find global opportunities by holding instruments from different markets.