Correlation Between Bottomline Technologies and Microsoft
Can any of the company-specific risk be diversified away by investing in both Bottomline Technologies and Microsoft 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 Bottomline Technologies and Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bottomline Technologies and Microsoft, you can compare the effects of market volatilities on Bottomline Technologies and Microsoft 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 Bottomline Technologies with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bottomline Technologies and Microsoft.
Diversification Opportunities for Bottomline Technologies and Microsoft
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bottomline and Microsoft is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bottomline Technologies and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and Bottomline 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 Bottomline Technologies are associated (or correlated) with Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Bottomline Technologies i.e., Bottomline Technologies and Microsoft go up and down completely randomly.
Pair Corralation between Bottomline Technologies and Microsoft
If you would invest 5,699 in Bottomline Technologies on January 24, 2024 and sell it today you would earn a total of 0.00 from holding Bottomline Technologies or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 2.38% |
Values | Daily Returns |
Bottomline Technologies vs. Microsoft
Performance |
Timeline |
Bottomline Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft |
Bottomline Technologies and Microsoft Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bottomline Technologies and Microsoft
The main advantage of trading using opposite Bottomline Technologies and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bottomline Technologies position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.Bottomline Technologies vs. National CineMedia | Bottomline Technologies vs. Organic Sales and | Bottomline Technologies vs. ZhongAn Online P | Bottomline Technologies vs. Arrow Electronics |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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