Correlation Between Exela Technologies and BSQUARE

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

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

Diversification Opportunities for Exela Technologies and BSQUARE

0.0

Correlation Coefficient

Exela Technologies  BSQUARE

Pay attention - limited upside

The 3 months correlation between Exela and BSQUARE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies and BSQUARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSQUARE and Exela Technologies 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 Exela Technologies 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 Exela Technologies i.e., Exela Technologies and BSQUARE go up and down completely randomly.

Pair Corralation between Exela Technologies and BSQUARE

If you would invest (100.00) in BSQUARE on December 1, 2024 and sell it today you would earn a total of  100.00  from holding BSQUARE or generate -100.0% return on investment over 90 days.

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

Exela Technologies  vs.  BSQUARE

Exela Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exela Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Exela Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BSQUARE

Risk-Adjusted Performance

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 Exela Technologies and BSQUARE

The main advantage of trading using opposite Exela Technologies and BSQUARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exela Technologies 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 Exela Technologies 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.