Correlation Between Bridgeline Digital and Exela Technologies

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

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

Diversification Opportunities for Bridgeline Digital and Exela Technologies

0.0

Correlation Coefficient

Bridgeline Digital  Exela Technologies

Pay attention - limited upside

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

Pair Corralation between Bridgeline Digital and Exela Technologies

If you would invest (100.00) in Exela Technologies on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Exela Technologies or generate -100.0% return on investment over 90 days.

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

Bridgeline Digital  vs.  Exela Technologies

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 current stock price disarray, may contribute to short-term losses for the investors.

Exela Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exela Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Exela Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bridgeline Digital and Exela Technologies

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

The idea behind Bridgeline Digital and Exela Technologies 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.