Correlation Between Bill and Manhattan Associates

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

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

Diversification Opportunities for Bill and Manhattan Associates

0.34

Correlation Coefficient

Bill  Manhattan Associates

Weak diversification

The 3 months correlation between Bill and Manhattan is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and Manhattan Associates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manhattan Associates and Bill 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 Bill Com Holdings are associated (or correlated) with Manhattan Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manhattan Associates has no effect on the direction of Bill i.e., Bill and Manhattan Associates go up and down completely randomly.

Pair Corralation between Bill and Manhattan Associates

Given the investment horizon of 90 days Bill is expected to generate 2.13 times less return on investment than Manhattan Associates. In addition to that, Bill is 1.55 times more volatile than Manhattan Associates. It trades about 0.02 of its total potential returns per unit of risk. Manhattan Associates is currently generating about 0.07 per unit of volatility. If you would invest  22,020  in Manhattan Associates on September 17, 2024 and sell it today you would earn a total of  7,797  from holding Manhattan Associates or generate 35.41% return on investment over 90 days.

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

Bill Com Holdings  vs.  Manhattan Associates

Bill Com Holdings

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Manhattan Associates

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Manhattan Associates are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Manhattan Associates may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bill and Manhattan Associates

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

The idea behind Bill Com Holdings and Manhattan Associates 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.