Correlation Between BC TECHNOLOGY and PACIFIC ONLINE

Can any of the company-specific risk be diversified away by investing in both BC TECHNOLOGY and PACIFIC ONLINE 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 PACIFIC ONLINE 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 PACIFIC ONLINE, you can compare the effects of market volatilities on BC TECHNOLOGY and PACIFIC ONLINE 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 PACIFIC ONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BC TECHNOLOGY and PACIFIC ONLINE.

Diversification Opportunities for BC TECHNOLOGY and PACIFIC ONLINE

0.31

Correlation Coefficient

BC TECHNOLOGY  PACIFIC ONLINE

Weak diversification

The 3 months correlation between 9D2 and PACIFIC is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BC TECHNOLOGY GROUP and PACIFIC ONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC ONLINE 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 PACIFIC ONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC ONLINE has no effect on the direction of BC TECHNOLOGY i.e., BC TECHNOLOGY and PACIFIC ONLINE go up and down completely randomly.

Pair Corralation between BC TECHNOLOGY and PACIFIC ONLINE

Assuming the 90 days horizon BC TECHNOLOGY is expected to generate 1.5 times less return on investment than PACIFIC ONLINE. But when comparing it to its historical volatility, BC TECHNOLOGY GROUP is 1.5 times less risky than PACIFIC ONLINE. It trades about 0.12 of its potential returns per unit of risk. PACIFIC ONLINE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  9.86  in PACIFIC ONLINE on May 7, 2025 and sell it today you would earn a total of  5.14  from holding PACIFIC ONLINE or generate 52.13% return on investment over 90 days.

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

BC TECHNOLOGY GROUP  vs.  PACIFIC ONLINE

BC TECHNOLOGY GROUP

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BC TECHNOLOGY GROUP are ranked lower than 9 (%) 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.

PACIFIC ONLINE

Risk-Adjusted Performance

OK

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

Pair Trading with BC TECHNOLOGY and PACIFIC ONLINE

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

The idea behind BC TECHNOLOGY GROUP and PACIFIC ONLINE 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.