Correlation Between TRAINLINE PLC and BC TECHNOLOGY

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

By analyzing existing cross correlation between TRAINLINE PLC LS and BC TECHNOLOGY GROUP, you can compare the effects of market volatilities on TRAINLINE PLC and BC 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 TRAINLINE PLC with a short position of BC TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and BC TECHNOLOGY.

Diversification Opportunities for TRAINLINE PLC and BC TECHNOLOGY

-0.04

Correlation Coefficient

TRAINLINE PLC  BC TECHNOLOGY

Good diversification

The 3 months correlation between TRAINLINE and 9D2 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and BC TECHNOLOGY GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC TECHNOLOGY GROUP and TRAINLINE PLC 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 TRAINLINE PLC LS are associated (or correlated) with BC TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC TECHNOLOGY GROUP has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and BC TECHNOLOGY go up and down completely randomly.

Pair Corralation between TRAINLINE PLC and BC TECHNOLOGY

Assuming the 90 days trading horizon TRAINLINE PLC is expected to generate 58.33 times less return on investment than BC TECHNOLOGY. But when comparing it to its historical volatility, TRAINLINE PLC LS is 1.34 times less risky than BC TECHNOLOGY. It trades about 0.0 of its potential returns per unit of risk. BC TECHNOLOGY GROUP is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  98.00  in BC TECHNOLOGY GROUP on March 30, 2025 and sell it today you would earn a total of  52.00  from holding BC TECHNOLOGY GROUP or generate 53.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

TRAINLINE PLC LS  vs.  BC TECHNOLOGY GROUP

TRAINLINE PLC LS

Risk-Adjusted Performance

Very Weak

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

BC TECHNOLOGY GROUP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BC TECHNOLOGY GROUP are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, BC TECHNOLOGY reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TRAINLINE PLC and BC TECHNOLOGY

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

The idea behind TRAINLINE PLC LS and BC TECHNOLOGY GROUP 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 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.