Correlation Between Morpho and BCPT

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

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

Diversification Opportunities for Morpho and BCPT

0.38

Correlation Coefficient

Morpho  BCPT

Weak diversification

The 3 months correlation between Morpho and BCPT is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Morpho and BCPT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCPT and Morpho 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 Morpho are associated (or correlated) with BCPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCPT has no effect on the direction of Morpho i.e., Morpho and BCPT go up and down completely randomly.

Pair Corralation between Morpho and BCPT

Assuming the 90 days trading horizon Morpho is expected to generate 0.76 times more return on investment than BCPT. However, Morpho is 1.32 times less risky than BCPT. It trades about 0.08 of its potential returns per unit of risk. BCPT is currently generating about -0.09 per unit of risk. If you would invest  127.00  in Morpho on May 6, 2025 and sell it today you would earn a total of  33.00  from holding Morpho or generate 25.98% return on investment over 90 days.

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

Morpho  vs.  BCPT

Morpho

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Morpho are ranked lower than 6 (%) 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.

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 September 2025. The latest tumult may also be a sign of longer-term up-swing for BCPT shareholders.

Pair Trading with Morpho and BCPT

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

The idea behind Morpho and BCPT 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.