Correlation Between Bridgeline Digital and Sphere 3D

Can any of the company-specific risk be diversified away by investing in both Bridgeline Digital and Sphere 3D 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 Bridgeline Digital and Sphere 3D into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bridgeline Digital and Sphere 3D Corp, you can compare the effects of market volatilities on Bridgeline Digital and Sphere 3D 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 Bridgeline Digital with a short position of Sphere 3D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgeline Digital and Sphere 3D.

Diversification Opportunities for Bridgeline Digital and Sphere 3D

0.55

Correlation Coefficient

Bridgeline Digital  Sphere 3D

Very weak diversification

The 3 months correlation between Bridgeline and Sphere is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bridgeline Digital and Sphere 3D Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere 3D Corp and Bridgeline Digital 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 Bridgeline Digital are associated (or correlated) with Sphere 3D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere 3D Corp has no effect on the direction of Bridgeline Digital i.e., Bridgeline Digital and Sphere 3D go up and down completely randomly.

Pair Corralation between Bridgeline Digital and Sphere 3D

Given the investment horizon of 90 days Bridgeline Digital is expected to generate 1.55 times more return on investment than Sphere 3D. However, Bridgeline Digital is 1.55 times more volatile than Sphere 3D Corp. It trades about -0.01 of its potential returns per unit of risk. Sphere 3D Corp is currently generating about -0.25 per unit of risk. If you would invest  174.00  in Bridgeline Digital on December 29, 2024 and sell it today you would lose (27.00) from holding Bridgeline Digital or give up 15.52% of portfolio value over 90 days.

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

Bridgeline Digital  vs.  Sphere 3D Corp

Bridgeline Digital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bridgeline Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Bridgeline Digital is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Sphere 3D Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sphere 3D Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Bridgeline Digital and Sphere 3D

The main advantage of trading using opposite Bridgeline Digital and Sphere 3D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgeline Digital position performs unexpectedly, Sphere 3D 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 Sphere 3D will offset losses from the drop in Sphere 3D's long position.

The idea behind Bridgeline Digital and Sphere 3D Corp 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.