Correlation Between BHCCN and ChargePoint Holdings

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

By analyzing existing cross correlation between BHCCN 11 30 SEP 28 and ChargePoint Holdings, you can compare the effects of market volatilities on BHCCN and ChargePoint Holdings 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 BHCCN with a short position of ChargePoint Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHCCN and ChargePoint Holdings.

Diversification Opportunities for BHCCN and ChargePoint Holdings

-0.21

Correlation Coefficient

BHCCN  ChargePoint Holdings

Very good diversification

The 3 months correlation between BHCCN and ChargePoint is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding BHCCN 11 30 SEP 28 and ChargePoint Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChargePoint Holdings and BHCCN 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 BHCCN 11 30 SEP 28 are associated (or correlated) with ChargePoint Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChargePoint Holdings has no effect on the direction of BHCCN i.e., BHCCN and ChargePoint Holdings go up and down completely randomly.

Pair Corralation between BHCCN and ChargePoint Holdings

Assuming the 90 days trading horizon BHCCN 11 30 SEP 28 is expected to under-perform the ChargePoint Holdings. In addition to that, BHCCN is 1.1 times more volatile than ChargePoint Holdings. It trades about -0.27 of its total potential returns per unit of risk. ChargePoint Holdings is currently generating about -0.13 per unit of volatility. If you would invest  129.00  in ChargePoint Holdings on October 12, 2024 and sell it today you would lose (17.00) from holding ChargePoint Holdings or give up 13.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

BHCCN 11 30 SEP 28  vs.  ChargePoint Holdings

BHCCN 11 30

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BHCCN 11 30 SEP 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators 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 BHCCN 11 30 SEP 28 investors.

ChargePoint Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChargePoint Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with BHCCN and ChargePoint Holdings

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

The idea behind BHCCN 11 30 SEP 28 and ChargePoint Holdings 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.