Correlation Between Bentley Systems and Semrush Holdings

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

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

Diversification Opportunities for Bentley Systems and Semrush Holdings

0.66

Correlation Coefficient

Bentley Systems  Semrush Holdings

Poor diversification

The 3 months correlation between Bentley and Semrush is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bentley Systems and Semrush Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semrush Holdings 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 Semrush Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semrush Holdings has no effect on the direction of Bentley Systems i.e., Bentley Systems and Semrush Holdings go up and down completely randomly.

Pair Corralation between Bentley Systems and Semrush Holdings

Considering the 90-day investment horizon Bentley Systems is expected to under-perform the Semrush Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Bentley Systems is 2.65 times less risky than Semrush Holdings. The stock trades about -0.15 of its potential returns per unit of risk. The Semrush Holdings is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  1,184  in Semrush Holdings on December 28, 2024 and sell it today you would lose (226.00) from holding Semrush Holdings or give up 19.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Bentley Systems  vs.  Semrush Holdings

Bentley Systems

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Semrush Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Semrush Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bentley Systems and Semrush Holdings

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

The idea behind Bentley Systems and Semrush Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.