Correlation Between Bentley SystemsInc and Brightcove

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Can any of the company-specific risk be diversified away by investing in both Bentley SystemsInc and Brightcove 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 Bentley SystemsInc and Brightcove into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bentley SystemsInc and Brightcove, you can compare the effects of market volatilities on Bentley SystemsInc and Brightcove 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 Bentley SystemsInc with a short position of Brightcove. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bentley SystemsInc and Brightcove.

Diversification Opportunities for Bentley SystemsInc and Brightcove

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Bentley and Brightcove is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bentley SystemsInc and Brightcove in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightcove and Bentley SystemsInc 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 Bentley SystemsInc are associated (or correlated) with Brightcove. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brightcove has no effect on the direction of Bentley SystemsInc i.e., Bentley SystemsInc and Brightcove go up and down completely randomly.

Pair Corralation between Bentley SystemsInc and Brightcove

Considering the 90-day investment horizon Bentley SystemsInc is expected to generate 0.5 times more return on investment than Brightcove. However, Bentley SystemsInc is 2.01 times less risky than Brightcove. It trades about -0.02 of its potential returns per unit of risk. Brightcove is currently generating about -0.16 per unit of risk. If you would invest  5,027  in Bentley SystemsInc on December 20, 2023 and sell it today you would lose (140.00) from holding Bentley SystemsInc or give up 2.78% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Bentley SystemsInc  vs.  Brightcove

 Performance 
       Timeline  
Bentley SystemsInc 

Risk-Adjusted Performance

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Over the last 90 days Bentley SystemsInc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Bentley SystemsInc is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Brightcove 

Risk-Adjusted Performance

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Low
 
High
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 unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Bentley SystemsInc and Brightcove Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bentley SystemsInc and Brightcove

The main advantage of trading using opposite Bentley SystemsInc and Brightcove positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bentley SystemsInc position performs unexpectedly, Brightcove 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 Brightcove will offset losses from the drop in Brightcove's long position.
The idea behind Bentley SystemsInc and Brightcove 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.
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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