Correlation Between Bentley Systems and Wirecard

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

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

Diversification Opportunities for Bentley Systems and Wirecard

0.38

Correlation Coefficient

Bentley Systems  Wirecard

Weak diversification

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

Pair Corralation between Bentley Systems and Wirecard

Considering the 90-day investment horizon Bentley Systems is expected to generate 199.52 times less return on investment than Wirecard. But when comparing it to its historical volatility, Bentley Systems is 65.71 times less risky than Wirecard. It trades about 0.04 of its potential returns per unit of risk. Wirecard AG is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Wirecard AG on September 22, 2024 and sell it today you would earn a total of  0.99  from holding Wirecard AG or generate 9900.0% return on investment over 90 days.

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

Bentley Systems  vs.  Wirecard AG

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.

Wirecard AG

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wirecard AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, Wirecard reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bentley Systems and Wirecard

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

The idea behind Bentley Systems and Wirecard AG 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.