Correlation Between Bentley Systems and MondayCom

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

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

Diversification Opportunities for Bentley Systems and MondayCom

0.33

Correlation Coefficient

Bentley Systems  MondayCom

Weak diversification

The 3 months correlation between Bentley and MondayCom is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bentley Systems and MondayCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MondayCom 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 MondayCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MondayCom has no effect on the direction of Bentley Systems i.e., Bentley Systems and MondayCom go up and down completely randomly.

Pair Corralation between Bentley Systems and MondayCom

Considering the 90-day investment horizon Bentley Systems is expected to under-perform the MondayCom. But the stock apears to be less risky and, when comparing its historical volatility, Bentley Systems is 2.12 times less risky than MondayCom. The stock trades about -0.03 of its potential returns per unit of risk. The MondayCom is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  26,313  in MondayCom on September 14, 2024 and sell it today you would earn a total of  1,891  from holding MondayCom or generate 7.19% return on investment over 90 days.

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

Bentley Systems  vs.  MondayCom

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

MondayCom

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MondayCom are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, MondayCom may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bentley Systems and MondayCom

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

The idea behind Bentley Systems and MondayCom 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..