Correlation Between RenoWorks Software and BSQUARE

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

By analyzing existing cross correlation between RenoWorks Software and BSQUARE, you can compare the effects of market volatilities on RenoWorks Software and BSQUARE 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 RenoWorks Software with a short position of BSQUARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of RenoWorks Software and BSQUARE.

Diversification Opportunities for RenoWorks Software and BSQUARE

0.0

Correlation Coefficient

RenoWorks Software  BSQUARE

Pay attention - limited upside

The 3 months correlation between RenoWorks and BSQUARE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RenoWorks Software and BSQUARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSQUARE and RenoWorks Software 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 RenoWorks Software are associated (or correlated) with BSQUARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSQUARE has no effect on the direction of RenoWorks Software i.e., RenoWorks Software and BSQUARE go up and down completely randomly.

Pair Corralation between RenoWorks Software and BSQUARE

If you would invest  16.00  in RenoWorks Software on October 9, 2024 and sell it today you would earn a total of  4.00  from holding RenoWorks Software or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

RenoWorks Software  vs.  BSQUARE

RenoWorks Software

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RenoWorks Software are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, RenoWorks Software reported solid returns over the last few months and may actually be approaching a breakup point.

BSQUARE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BSQUARE has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, BSQUARE is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with RenoWorks Software and BSQUARE

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

The idea behind RenoWorks Software and BSQUARE 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.