Correlation Between BC TECHNOLOGY and ASM International

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

Diversification Opportunities for BC TECHNOLOGY and ASM International

0.26

Correlation Coefficient

BC TECHNOLOGY  ASM International

Modest diversification

The 3 months correlation between 9D2 and ASM is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding BC TECHNOLOGY GROUP and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International 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 ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of BC TECHNOLOGY i.e., BC TECHNOLOGY and ASM International go up and down completely randomly.

Pair Corralation between BC TECHNOLOGY and ASM International

Assuming the 90 days horizon BC TECHNOLOGY is expected to generate 1.7 times less return on investment than ASM International. In addition to that, BC TECHNOLOGY is 1.42 times more volatile than ASM International NV. It trades about 0.13 of its total potential returns per unit of risk. ASM International NV is currently generating about 0.32 per unit of volatility. If you would invest  38,330  in ASM International NV on February 9, 2025 and sell it today you would earn a total of  6,920  from holding ASM International NV or generate 18.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

BC TECHNOLOGY GROUP  vs.  ASM International NV

BC TECHNOLOGY GROUP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BC TECHNOLOGY GROUP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BC TECHNOLOGY may actually be approaching a critical reversion point that can send shares even higher in June 2025.

ASM International

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASM International NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with BC TECHNOLOGY and ASM International

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

The idea behind BC TECHNOLOGY GROUP and ASM International NV 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.