Correlation Between Bridgeline Digital and EngageSmart LLC

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

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

Diversification Opportunities for Bridgeline Digital and EngageSmart LLC

0.0

Correlation Coefficient

Bridgeline Digital  EngageSmart LLC

Pay attention - limited upside

The 3 months correlation between Bridgeline and EngageSmart is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bridgeline Digital and EngageSmart LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EngageSmart LLC 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 EngageSmart LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EngageSmart LLC has no effect on the direction of Bridgeline Digital i.e., Bridgeline Digital and EngageSmart LLC go up and down completely randomly.

Pair Corralation between Bridgeline Digital and EngageSmart LLC

If you would invest  114.00  in Bridgeline Digital on November 27, 2024 and sell it today you would earn a total of  28.00  from holding Bridgeline Digital or generate 24.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bridgeline Digital  vs.  EngageSmart LLC

Bridgeline Digital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgeline Digital are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Bridgeline Digital displayed solid returns over the last few months and may actually be approaching a breakup point.

EngageSmart LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days EngageSmart LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, EngageSmart LLC is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bridgeline Digital and EngageSmart LLC

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

The idea behind Bridgeline Digital and EngageSmart 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.