Correlation Between Bottomline Technologies and Steven Madden

Can any of the company-specific risk be diversified away by investing in both Bottomline Technologies and Steven Madden 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 Steven Madden into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bottomline Technologies and Steven Madden, you can compare the effects of market volatilities on Bottomline Technologies and Steven Madden 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 Steven Madden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bottomline Technologies and Steven Madden.

Diversification Opportunities for Bottomline Technologies and Steven Madden

0.68

Correlation Coefficient

Bottomline Technologies  Steven Madden

Poor diversification

The 3 months correlation between Bottomline and Steven is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bottomline Technologies and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden 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 Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of Bottomline Technologies i.e., Bottomline Technologies and Steven Madden go up and down completely randomly.

Pair Corralation between Bottomline Technologies and Steven Madden

If you would invest  5,699  in Bottomline Technologies on February 2, 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 Together
Strength	Significant
Accuracy	4.35%
Values	Daily Returns

Bottomline Technologies  vs.  Steven Madden

Bottomline Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bottomline Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Bottomline Technologies is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Steven Madden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Steven Madden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Steven Madden is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bottomline Technologies and Steven Madden

The main advantage of trading using opposite Bottomline Technologies and Steven Madden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bottomline Technologies position performs unexpectedly, Steven Madden 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 Steven Madden will offset losses from the drop in Steven Madden's long position.

The idea behind Bottomline Technologies and Steven Madden 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.