Correlation Between Bm Technologies and DataDot Technology

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

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

Diversification Opportunities for Bm Technologies and DataDot Technology

0.0

Correlation Coefficient

Bm Technologies  DataDot Technology

Pay attention - limited upside

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

Pair Corralation between Bm Technologies and DataDot Technology

If you would invest  157.00  in Bm Technologies on February 1, 2024 and sell it today you would earn a total of  2.00  from holding Bm Technologies or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bm Technologies  vs.  DataDot Technology Limited

Bm Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bm Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

DataDot Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DataDot Technology Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, DataDot Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bm Technologies and DataDot Technology

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

The idea behind Bm Technologies and DataDot Technology Limited 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.