Correlation Between BCPT and Morpho

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

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

Diversification Opportunities for BCPT and Morpho

0.28

Correlation Coefficient

BCPT  Morpho

Modest diversification

The 3 months correlation between BCPT and Morpho is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding BCPT and Morpho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morpho and BCPT 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 BCPT are associated (or correlated) with Morpho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morpho has no effect on the direction of BCPT i.e., BCPT and Morpho go up and down completely randomly.

Pair Corralation between BCPT and Morpho

Assuming the 90 days trading horizon BCPT is expected to under-perform the Morpho. In addition to that, BCPT is 1.27 times more volatile than Morpho. It trades about -0.08 of its total potential returns per unit of risk. Morpho is currently generating about 0.11 per unit of volatility. If you would invest  129.00  in Morpho on April 25, 2025 and sell it today you would earn a total of  60.00  from holding Morpho or generate 46.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BCPT  vs.  Morpho

BCPT

Risk-Adjusted Performance

Very Weak

Over the last 90 days BCPT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for BCPT shareholders.

Morpho

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morpho are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Morpho sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BCPT and Morpho

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

The idea behind BCPT and Morpho 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.