Correlation Between Bentley Systems and Vimeo

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

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

Diversification Opportunities for Bentley Systems and Vimeo

-0.38

Correlation Coefficient

Bentley Systems  Vimeo

Very good diversification

The 3 months correlation between Bentley and Vimeo is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bentley Systems and Vimeo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vimeo Inc 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 Vimeo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vimeo Inc has no effect on the direction of Bentley Systems i.e., Bentley Systems and Vimeo go up and down completely randomly.

Pair Corralation between Bentley Systems and Vimeo

Considering the 90-day investment horizon Bentley Systems is expected to under-perform the Vimeo. But the stock apears to be less risky and, when comparing its historical volatility, Bentley Systems is 1.91 times less risky than Vimeo. The stock trades about -0.28 of its potential returns per unit of risk. The Vimeo Inc is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  675.00  in Vimeo Inc on October 5, 2024 and sell it today you would lose (27.00) from holding Vimeo Inc or give up 4.0% of portfolio value over 90 days.

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

Bentley Systems  vs.  Vimeo Inc

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.

Vimeo Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vimeo Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical and fundamental indicators, Vimeo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bentley Systems and Vimeo

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

The idea behind Bentley Systems and Vimeo Inc 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.