Correlation Between Sun Vending and BPS TECHNOLOGY

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

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

Diversification Opportunities for Sun Vending and BPS TECHNOLOGY

0.49

Correlation Coefficient

Sun Vending  BPS TECHNOLOGY

Very weak diversification

The 3 months correlation between Sun and BPS is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sun Vending Technology 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 Sun Vending 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 Sun Vending Technology 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 Sun Vending i.e., Sun Vending and BPS TECHNOLOGY go up and down completely randomly.

Pair Corralation between Sun Vending and BPS TECHNOLOGY

Assuming the 90 days trading horizon Sun Vending Technology is expected to generate 0.51 times more return on investment than BPS TECHNOLOGY. However, Sun Vending Technology is 1.97 times less risky than BPS TECHNOLOGY. It trades about -0.03 of its potential returns per unit of risk. BPS TECHNOLOGY PUBLIC is currently generating about -0.06 per unit of risk. If you would invest  198.00  in Sun Vending Technology on December 3, 2024 and sell it today you would lose (59.00) from holding Sun Vending Technology or give up 29.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	69.38%
Values	Daily Returns

Sun Vending Technology  vs.  BPS TECHNOLOGY PUBLIC

Sun Vending Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Vending Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional 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 Sun Vending and BPS TECHNOLOGY

The main advantage of trading using opposite Sun Vending and BPS TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Vending 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 Sun Vending Technology 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.