Correlation Between BMTC and Super Micro

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

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

Diversification Opportunities for BMTC and Super Micro

0.87

Correlation Coefficient

BMTC  Super Micro

Very poor diversification

The 3 months correlation between BMTC and Super is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding BMTC Group and Super Micro Computer, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Micro Computer, and BMTC 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 BMTC Group are associated (or correlated) with Super Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Micro Computer, has no effect on the direction of BMTC i.e., BMTC and Super Micro go up and down completely randomly.

Pair Corralation between BMTC and Super Micro

Assuming the 90 days trading horizon BMTC is expected to generate 3.61 times less return on investment than Super Micro. But when comparing it to its historical volatility, BMTC Group is 2.59 times less risky than Super Micro. It trades about 0.15 of its potential returns per unit of risk. Super Micro Computer, is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  985.00  in Super Micro Computer, on April 20, 2025 and sell it today you would earn a total of  737.00  from holding Super Micro Computer, or generate 74.82% return on investment over 90 days.

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

BMTC Group  vs.  Super Micro Computer,

BMTC Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BMTC Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, BMTC displayed solid returns over the last few months and may actually be approaching a breakup point.

Super Micro Computer,

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Super Micro Computer, are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Super Micro exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BMTC and Super Micro

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

The idea behind BMTC Group and Super Micro Computer, 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.