Correlation Between Benefitfocus and Descartes Systems
Can any of the company-specific risk be diversified away by investing in both Benefitfocus and Descartes Systems 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 Benefitfocus and Descartes Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benefitfocus and Descartes Systems Group, you can compare the effects of market volatilities on Benefitfocus and Descartes Systems 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 Benefitfocus with a short position of Descartes Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benefitfocus and Descartes Systems.
Diversification Opportunities for Benefitfocus and Descartes Systems
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Benefitfocus and Descartes is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Benefitfocus and Descartes Systems Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Descartes Systems and Benefitfocus 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 Benefitfocus are associated (or correlated) with Descartes Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Descartes Systems has no effect on the direction of Benefitfocus i.e., Benefitfocus and Descartes Systems go up and down completely randomly.
Pair Corralation between Benefitfocus and Descartes Systems
Given the investment horizon of 90 days Benefitfocus is expected to generate 2.61 times more return on investment than Descartes Systems. However, Benefitfocus is 2.61 times more volatile than Descartes Systems Group. It trades about 0.03 of its potential returns per unit of risk. Descartes Systems Group is currently generating about 0.06 per unit of risk. If you would invest 983.00 in Benefitfocus on January 25, 2024 and sell it today you would earn a total of 67.00 from holding Benefitfocus or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 37.25% |
| Values | Daily Returns |
Benefitfocus vs. Descartes Systems Group
Performance |
| Timeline |
| Benefitfocus |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Descartes Systems |
Benefitfocus and Descartes Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benefitfocus and Descartes Systems
The main advantage of trading using opposite Benefitfocus and Descartes Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benefitfocus position performs unexpectedly, Descartes Systems 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 Descartes Systems will offset losses from the drop in Descartes Systems' long position.| Benefitfocus vs. Coupang LLC | Benefitfocus vs. Cedar Realty Trust | Benefitfocus vs. Tyson Foods | Benefitfocus vs. NH Foods Ltd |
| Descartes Systems vs. C3 Ai Inc | Descartes Systems vs. Shopify | Descartes Systems vs. Snowflake | Descartes Systems vs. ServiceNow |
Check out your portfolio center.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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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