Correlation Between Expensify and Bentley Systems
Can any of the company-specific risk be diversified away by investing in both Expensify and Bentley Systems 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 Expensify and Bentley Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expensify and Bentley Systems, you can compare the effects of market volatilities on Expensify and Bentley Systems 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 Expensify with a short position of Bentley Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expensify and Bentley Systems.
Diversification Opportunities for Expensify and Bentley Systems
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Expensify and Bentley is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and Bentley Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bentley Systems and Expensify 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 Expensify are associated (or correlated) with Bentley Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bentley Systems has no effect on the direction of Expensify i.e., Expensify and Bentley Systems go up and down completely randomly.
Pair Corralation between Expensify and Bentley Systems
Given the investment horizon of 90 days Expensify is expected to under-perform the Bentley Systems. In addition to that, Expensify is 3.33 times more volatile than Bentley Systems. It trades about -0.01 of its total potential returns per unit of risk. Bentley Systems is currently generating about 0.0 per unit of volatility. If you would invest 5,224 in Bentley Systems on August 28, 2024 and sell it today you would lose (262.00) from holding Bentley Systems or give up 5.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expensify vs. Bentley Systems
Performance |
| Timeline |
| Expensify |
| Bentley Systems |
Expensify and Bentley Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expensify and Bentley Systems
The main advantage of trading using opposite Expensify and Bentley Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expensify position performs unexpectedly, Bentley Systems 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 Bentley Systems will offset losses from the drop in Bentley Systems' long position.The idea behind Expensify and Bentley Systems 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.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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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