Correlation Between Bridgeline Digital and Tucows

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

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

Diversification Opportunities for Bridgeline Digital and Tucows

-0.61

Correlation Coefficient

Bridgeline Digital  Tucows

Excellent diversification

The 3 months correlation between Bridgeline and Tucows is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bridgeline Digital and Tucows Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tucows Inc 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 Tucows. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tucows Inc has no effect on the direction of Bridgeline Digital i.e., Bridgeline Digital and Tucows go up and down completely randomly.

Pair Corralation between Bridgeline Digital and Tucows

Given the investment horizon of 90 days Bridgeline Digital is expected to under-perform the Tucows. In addition to that, Bridgeline Digital is 1.52 times more volatile than Tucows Inc. It trades about -0.01 of its total potential returns per unit of risk. Tucows Inc is currently generating about 0.03 per unit of volatility. If you would invest  1,657  in Tucows Inc on December 29, 2024 and sell it today you would earn a total of  47.00  from holding Tucows Inc or generate 2.84% return on investment over 90 days.

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

Bridgeline Digital  vs.  Tucows Inc

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.

Tucows Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tucows Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Tucows may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Bridgeline Digital and Tucows

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

The idea behind Bridgeline Digital and Tucows Inc 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.