Correlation Between Bentley SystemsInc and Dynatrace Holdings

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

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

Diversification Opportunities for Bentley SystemsInc and Dynatrace Holdings

0.23

Correlation Coefficient

Bentley SystemsInc  Dynatrace Holdings

Modest diversification

The 3 months correlation between Bentley and Dynatrace is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bentley SystemsInc and Dynatrace Holdings LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynatrace Holdings LLC 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 Dynatrace Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynatrace Holdings LLC has no effect on the direction of Bentley SystemsInc i.e., Bentley SystemsInc and Dynatrace Holdings go up and down completely randomly.

Pair Corralation between Bentley SystemsInc and Dynatrace Holdings

Considering the 90-day investment horizon Bentley SystemsInc is expected to generate 1.17 times more return on investment than Dynatrace Holdings. However, Bentley SystemsInc is 1.17 times more volatile than Dynatrace Holdings LLC. It trades about 0.16 of its potential returns per unit of risk. Dynatrace Holdings LLC is currently generating about 0.01 per unit of risk. If you would invest  5,119  in Bentley SystemsInc on January 25, 2024 and sell it today you would earn a total of  323.00  from holding Bentley SystemsInc or generate 6.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Bentley SystemsInc  vs.  Dynatrace Holdings LLC

Bentley SystemsInc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bentley SystemsInc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Bentley SystemsInc may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Dynatrace Holdings LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dynatrace Holdings LLC 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 comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bentley SystemsInc and Dynatrace Holdings

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

The idea behind Bentley SystemsInc and Dynatrace Holdings LLC 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..