Correlation Between Bentley Systems and Dave Warrants

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

By analyzing existing cross correlation between Bentley Systems and Dave Warrants, you can compare the effects of market volatilities on Bentley Systems and Dave Warrants 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 Bentley Systems with a short position of Dave Warrants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bentley Systems and Dave Warrants.

Diversification Opportunities for Bentley Systems and Dave Warrants

-0.32

Correlation Coefficient

Bentley Systems  Dave Warrants

Very good diversification

The 3 months correlation between Bentley and Dave is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bentley Systems and Dave Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dave Warrants and Bentley Systems 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 Bentley Systems are associated (or correlated) with Dave Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dave Warrants has no effect on the direction of Bentley Systems i.e., Bentley Systems and Dave Warrants go up and down completely randomly.

Pair Corralation between Bentley Systems and Dave Warrants

Considering the 90-day investment horizon Bentley Systems is expected to under-perform the Dave Warrants. But the stock apears to be less risky and, when comparing its historical volatility, Bentley Systems is 8.29 times less risky than Dave Warrants. The stock trades about -0.05 of its potential returns per unit of risk. The Dave Warrants is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Dave Warrants on September 15, 2024 and sell it today you would earn a total of  8.00  from holding Dave Warrants or generate 80.0% return on investment over 90 days.

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

Bentley Systems  vs.  Dave Warrants

Bentley Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bentley Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Bentley Systems is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Dave Warrants

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dave Warrants are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Dave Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bentley Systems and Dave Warrants

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

The idea behind Bentley Systems and Dave Warrants 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.