Correlation Between Bill and Pegasystems
Can any of the company-specific risk be diversified away by investing in both Bill and Pegasystems 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 Bill and Pegasystems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bill Com Holdings and Pegasystems, you can compare the effects of market volatilities on Bill and Pegasystems 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 Bill with a short position of Pegasystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bill and Pegasystems.
Diversification Opportunities for Bill and Pegasystems
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bill and Pegasystems is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and Pegasystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasystems and Bill 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 Bill Com Holdings are associated (or correlated) with Pegasystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasystems has no effect on the direction of Bill i.e., Bill and Pegasystems go up and down completely randomly.
Pair Corralation between Bill and Pegasystems
Given the investment horizon of 90 days Bill is expected to generate 2.43 times less return on investment than Pegasystems. But when comparing it to its historical volatility, Bill Com Holdings is 1.04 times less risky than Pegasystems. It trades about 0.05 of its potential returns per unit of risk. Pegasystems is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,629 in Pegasystems on November 9, 2024 and sell it today you would earn a total of 5,898 from holding Pegasystems or generate 127.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bill Com Holdings vs. Pegasystems
Performance |
| Timeline |
| Bill Com Holdings |
| Pegasystems |
Bill and Pegasystems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bill and Pegasystems
The main advantage of trading using opposite Bill and Pegasystems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bill position performs unexpectedly, Pegasystems 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 Pegasystems will offset losses from the drop in Pegasystems' long position.The idea behind Bill Com Holdings and Pegasystems 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.| Pegasystems vs. Wex Inc | Pegasystems vs. Cognex | Pegasystems vs. Progress Software | Pegasystems vs. Fair Isaac |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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