Correlation Between Bentley SystemsInc and HubSpot

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

Diversification Opportunities for Bentley SystemsInc and HubSpot

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Bentley and HubSpot is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bentley SystemsInc and HubSpot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HubSpot 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 HubSpot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HubSpot has no effect on the direction of Bentley SystemsInc i.e., Bentley SystemsInc and HubSpot go up and down completely randomly.

Pair Corralation between Bentley SystemsInc and HubSpot

Considering the 90-day investment horizon Bentley SystemsInc is expected to generate 1.83 times less return on investment than HubSpot. But when comparing it to its historical volatility, Bentley SystemsInc is 1.4 times less risky than HubSpot. It trades about 0.07 of its potential returns per unit of risk. HubSpot is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  27,262  in HubSpot on December 19, 2023 and sell it today you would earn a total of  32,723  from holding HubSpot or generate 120.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.73%
ValuesDaily Returns

Bentley SystemsInc  vs.  HubSpot

 Performance 
       Timeline  
Bentley SystemsInc 

Risk-Adjusted Performance

0 of 100

 
Low
 
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 current stock price disturbance, may contribute to short-term losses for the investors.
HubSpot 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in HubSpot are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, HubSpot may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Bentley SystemsInc and HubSpot Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bentley SystemsInc and HubSpot

The main advantage of trading using opposite Bentley SystemsInc and HubSpot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bentley SystemsInc position performs unexpectedly, HubSpot 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 HubSpot will offset losses from the drop in HubSpot's long position.
The idea behind Bentley SystemsInc and HubSpot 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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