Correlation Between Bentley Systems and Quhuo

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

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

Diversification Opportunities for Bentley Systems and Quhuo

0.05

Correlation Coefficient

Bentley Systems  Quhuo

Significant diversification

The 3 months correlation between Bentley and Quhuo is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bentley Systems and Quhuo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quhuo 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 Quhuo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quhuo has no effect on the direction of Bentley Systems i.e., Bentley Systems and Quhuo go up and down completely randomly.

Pair Corralation between Bentley Systems and Quhuo

Considering the 90-day investment horizon Bentley Systems is expected to generate 9.86 times less return on investment than Quhuo. But when comparing it to its historical volatility, Bentley Systems is 8.3 times less risky than Quhuo. It trades about 0.03 of its potential returns per unit of risk. Quhuo is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  151.00  in Quhuo on October 5, 2024 and sell it today you would lose (3.00) from holding Quhuo or give up 1.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Bentley Systems  vs.  Quhuo

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.

Quhuo

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quhuo are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Quhuo is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bentley Systems and Quhuo

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

The idea behind Bentley Systems and Quhuo 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.