Correlation Between BC Technology and Simpson Manufacturing
Can any of the company-specific risk be diversified away by investing in both BC Technology and Simpson Manufacturing 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 BC Technology and Simpson Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BC Technology Group and Simpson Manufacturing, you can compare the effects of market volatilities on BC Technology and Simpson Manufacturing 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 BC Technology with a short position of Simpson Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of BC Technology and Simpson Manufacturing.
Diversification Opportunities for BC Technology and Simpson Manufacturing
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BCTCF and Simpson is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding BC Technology Group and Simpson Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simpson Manufacturing and BC Technology 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 BC Technology Group are associated (or correlated) with Simpson Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simpson Manufacturing has no effect on the direction of BC Technology i.e., BC Technology and Simpson Manufacturing go up and down completely randomly.
Pair Corralation between BC Technology and Simpson Manufacturing
Assuming the 90 days horizon BC Technology Group is expected to generate 0.49 times more return on investment than Simpson Manufacturing. However, BC Technology Group is 2.05 times less risky than Simpson Manufacturing. It trades about -0.07 of its potential returns per unit of risk. Simpson Manufacturing is currently generating about -0.11 per unit of risk. If you would invest 213.00 in BC Technology Group on August 29, 2025 and sell it today you would lose (8.00) from holding BC Technology Group or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
BC Technology Group vs. Simpson Manufacturing
Performance |
| Timeline |
| BC Technology Group |
| Simpson Manufacturing |
BC Technology and Simpson Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BC Technology and Simpson Manufacturing
The main advantage of trading using opposite BC Technology and Simpson Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BC Technology position performs unexpectedly, Simpson Manufacturing 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 Simpson Manufacturing will offset losses from the drop in Simpson Manufacturing's long position.| BC Technology vs. Cue Health | BC Technology vs. National Healthcare Logistics | BC Technology vs. Quality Online Education | BC Technology vs. CarsalesCom Ltd ADR |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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