Correlation Between Bentley Systems and Guidewire Software
Can any of the company-specific risk be diversified away by investing in both Bentley Systems and Guidewire Software 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 Guidewire Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bentley Systems and Guidewire Software, you can compare the effects of market volatilities on Bentley Systems and Guidewire Software 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 Guidewire Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bentley Systems and Guidewire Software.
Diversification Opportunities for Bentley Systems and Guidewire Software
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bentley and Guidewire is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bentley Systems and Guidewire Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidewire Software 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 Guidewire Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidewire Software has no effect on the direction of Bentley Systems i.e., Bentley Systems and Guidewire Software go up and down completely randomly.
Pair Corralation between Bentley Systems and Guidewire Software
Considering the 90-day investment horizon Bentley Systems is expected to under-perform the Guidewire Software. In addition to that, Bentley Systems is 1.72 times more volatile than Guidewire Software. It trades about -0.01 of its total potential returns per unit of risk. Guidewire Software is currently generating about 0.34 per unit of volatility. If you would invest 18,803 in Guidewire Software on August 27, 2024 and sell it today you would earn a total of 1,479 from holding Guidewire Software or generate 7.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bentley Systems vs. Guidewire Software
Performance |
| Timeline |
| Bentley Systems |
| Guidewire Software |
Bentley Systems and Guidewire Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bentley Systems and Guidewire Software
The main advantage of trading using opposite Bentley Systems and Guidewire Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bentley Systems position performs unexpectedly, Guidewire Software 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 Guidewire Software will offset losses from the drop in Guidewire Software's long position.| Bentley Systems vs. Appfolio | Bentley Systems vs. Workiva | Bentley Systems vs. Alarm Holdings | Bentley Systems vs. nCino Inc |
| Guidewire Software vs. Blackbaud | Guidewire Software vs. Enfusion | Guidewire Software vs. E2open Parent Holdings | Guidewire Software vs. Manhattan Associates |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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