Correlation Between Brightcove and Bentley SystemsInc

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

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

Diversification Opportunities for Brightcove and Bentley SystemsInc

0.29

Correlation Coefficient

Brightcove  Bentley SystemsInc

Modest diversification

The 3 months correlation between Brightcove and Bentley is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Brightcove and Bentley SystemsInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bentley SystemsInc and Brightcove 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 Brightcove are associated (or correlated) with Bentley SystemsInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bentley SystemsInc has no effect on the direction of Brightcove i.e., Brightcove and Bentley SystemsInc go up and down completely randomly.

Pair Corralation between Brightcove and Bentley SystemsInc

Given the investment horizon of 90 days Brightcove is expected to under-perform the Bentley SystemsInc. In addition to that, Brightcove is 1.17 times more volatile than Bentley SystemsInc. It trades about -0.24 of its total potential returns per unit of risk. Bentley SystemsInc is currently generating about 0.11 per unit of volatility. If you would invest  5,119  in Bentley SystemsInc on January 23, 2024 and sell it today you would earn a total of  201.00  from holding Bentley SystemsInc or generate 3.93% return on investment over 90 days.

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

Brightcove  vs.  Bentley SystemsInc

Brightcove

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brightcove has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Bentley SystemsInc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bentley SystemsInc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Bentley SystemsInc is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Brightcove and Bentley SystemsInc

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

The idea behind Brightcove and Bentley SystemsInc 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 CEOs Directory module to screen CEOs from public companies around the world.