Correlation Between Guidewire Software and BECLE SAB
Can any of the company-specific risk be diversified away by investing in both Guidewire Software and BECLE SAB 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 Guidewire Software and BECLE SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidewire Software and BECLE SAB DE, you can compare the effects of market volatilities on Guidewire Software and BECLE SAB 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 Guidewire Software with a short position of BECLE SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidewire Software and BECLE SAB.
Diversification Opportunities for Guidewire Software and BECLE SAB
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Guidewire and BECLE is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Guidewire Software and BECLE SAB DE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BECLE SAB DE and Guidewire 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 Guidewire Software are associated (or correlated) with BECLE SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BECLE SAB DE has no effect on the direction of Guidewire Software i.e., Guidewire Software and BECLE SAB go up and down completely randomly.
Pair Corralation between Guidewire Software and BECLE SAB
Assuming the 90 days trading horizon Guidewire Software is expected to generate 0.56 times more return on investment than BECLE SAB. However, Guidewire Software is 1.79 times less risky than BECLE SAB. It trades about 0.1 of its potential returns per unit of risk. BECLE SAB DE is currently generating about 0.0 per unit of risk. If you would invest 10,600 in Guidewire Software on October 18, 2024 and sell it today you would earn a total of 6,400 from holding Guidewire Software or generate 60.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Guidewire Software vs. BECLE SAB DE
Performance |
| Timeline |
| Guidewire Software |
| BECLE SAB DE |
Guidewire Software and BECLE SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidewire Software and BECLE SAB
The main advantage of trading using opposite Guidewire Software and BECLE SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidewire Software position performs unexpectedly, BECLE SAB 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 BECLE SAB will offset losses from the drop in BECLE SAB's long position.| Guidewire Software vs. Vulcan Materials | Guidewire Software vs. Live Nation Entertainment | Guidewire Software vs. VULCAN MATERIALS | Guidewire Software vs. Ubisoft Entertainment SA |
| BECLE SAB vs. Air Lease | BECLE SAB vs. Axway Software SA | BECLE SAB vs. Guidewire Software | BECLE SAB vs. FORMPIPE SOFTWARE AB |
Check out your portfolio center.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 CEOs Directory module to screen CEOs from public companies around the world.
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