Correlation Between Bentley Systems and SSC Technologies

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

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

Diversification Opportunities for Bentley Systems and SSC Technologies

-0.4

Correlation Coefficient

Bentley Systems  SSC Technologies

Very good diversification

The 3 months correlation between Bentley and SSC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bentley Systems and SSC Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies 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 SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies Holdings has no effect on the direction of Bentley Systems i.e., Bentley Systems and SSC Technologies go up and down completely randomly.

Pair Corralation between Bentley Systems and SSC Technologies

Considering the 90-day investment horizon Bentley Systems is expected to under-perform the SSC Technologies. In addition to that, Bentley Systems is 1.19 times more volatile than SSC Technologies Holdings. It trades about -0.11 of its total potential returns per unit of risk. SSC Technologies Holdings is currently generating about 0.19 per unit of volatility. If you would invest  7,709  in SSC Technologies Holdings on November 29, 2024 and sell it today you would earn a total of  1,125  from holding SSC Technologies Holdings or generate 14.59% return on investment over 90 days.

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

Bentley Systems  vs.  SSC Technologies 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 latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SSC Technologies Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, SSC Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bentley Systems and SSC Technologies

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

The idea behind Bentley Systems and SSC Technologies 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.