Correlation Between Bentley Systems and PDF Solutions

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

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

Diversification Opportunities for Bentley Systems and PDF Solutions

0.43

Correlation Coefficient

Bentley Systems  PDF Solutions

Very weak diversification

The 3 months correlation between Bentley and PDF is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bentley Systems and PDF Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDF Solutions 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 PDF Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDF Solutions has no effect on the direction of Bentley Systems i.e., Bentley Systems and PDF Solutions go up and down completely randomly.

Pair Corralation between Bentley Systems and PDF Solutions

Considering the 90-day investment horizon Bentley Systems is expected to generate 0.74 times more return on investment than PDF Solutions. However, Bentley Systems is 1.35 times less risky than PDF Solutions. It trades about -0.01 of its potential returns per unit of risk. PDF Solutions is currently generating about -0.01 per unit of risk. If you would invest  5,020  in Bentley Systems on October 5, 2024 and sell it today you would lose (370.00) from holding Bentley Systems or give up 7.37% of portfolio value over 90 days.

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

Bentley Systems  vs.  PDF Solutions

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.

PDF Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PDF Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Bentley Systems and PDF Solutions

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

The idea behind Bentley Systems and PDF Solutions 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.