Correlation Between Grow Solutions and Bm Technologies

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

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

Diversification Opportunities for Grow Solutions and Bm Technologies

0.0

Correlation Coefficient

Grow Solutions  Bm Technologies

Pay attention - limited upside

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

Pair Corralation between Grow Solutions and Bm Technologies

Given the investment horizon of 90 days Grow Solutions Holdings is expected to generate 4.42 times more return on investment than Bm Technologies. However, Grow Solutions is 4.42 times more volatile than Bm Technologies. It trades about 0.08 of its potential returns per unit of risk. Bm Technologies is currently generating about -0.01 per unit of risk. If you would invest  0.02  in Grow Solutions Holdings on February 21, 2024 and sell it today you would lose (0.02) from holding Grow Solutions Holdings or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.56%
Values	Daily Returns

Grow Solutions Holdings  vs.  Bm Technologies

Grow Solutions Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bm Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bm Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Bm Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grow Solutions and Bm Technologies

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

The idea behind Grow Solutions Holdings and Bm Technologies 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.

Check out your portfolio center.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.