Correlation Between Bentley SystemsInc and DoubleVerify Holdings

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Can any of the company-specific risk be diversified away by investing in both Bentley SystemsInc and DoubleVerify 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 DoubleVerify 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 DoubleVerify Holdings, you can compare the effects of market volatilities on Bentley SystemsInc and DoubleVerify 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 DoubleVerify Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bentley SystemsInc and DoubleVerify Holdings.

Diversification Opportunities for Bentley SystemsInc and DoubleVerify Holdings

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Bentley and DoubleVerify is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bentley SystemsInc and DoubleVerify Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleVerify Holdings 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 DoubleVerify Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleVerify Holdings has no effect on the direction of Bentley SystemsInc i.e., Bentley SystemsInc and DoubleVerify Holdings go up and down completely randomly.

Pair Corralation between Bentley SystemsInc and DoubleVerify Holdings

Considering the 90-day investment horizon Bentley SystemsInc is expected to generate 1.89 times less return on investment than DoubleVerify Holdings. But when comparing it to its historical volatility, Bentley SystemsInc is 1.18 times less risky than DoubleVerify Holdings. It trades about 0.02 of its potential returns per unit of risk. DoubleVerify Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,644  in DoubleVerify Holdings on December 19, 2023 and sell it today you would earn a total of  665.00  from holding DoubleVerify Holdings or generate 25.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.8%
ValuesDaily Returns

Bentley SystemsInc  vs.  DoubleVerify Holdings

 Performance 
       Timeline  
Bentley SystemsInc 

Risk-Adjusted Performance

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High
Very Weak
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 recent stock price disturbance, may contribute to short-term losses for the investors.
DoubleVerify Holdings 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days DoubleVerify Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, DoubleVerify Holdings is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Bentley SystemsInc and DoubleVerify Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bentley SystemsInc and DoubleVerify Holdings

The main advantage of trading using opposite Bentley SystemsInc and DoubleVerify Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bentley SystemsInc position performs unexpectedly, DoubleVerify 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 DoubleVerify Holdings will offset losses from the drop in DoubleVerify Holdings' long position.
The idea behind Bentley SystemsInc and DoubleVerify Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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