Correlation Between Goodrx Holdings and Bigcommerce Holdings

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

By analyzing existing cross correlation between Goodrx Holdings and Bigcommerce Holdings, you can compare the effects of market volatilities on Goodrx Holdings and Bigcommerce Holdings 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 Goodrx Holdings with a short position of Bigcommerce Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodrx Holdings and Bigcommerce Holdings.

Diversification Opportunities for Goodrx Holdings and Bigcommerce Holdings

-0.64

Correlation Coefficient

Goodrx Holdings  Bigcommerce Holdings

Excellent diversification

The 3 months correlation between Goodrx and Bigcommerce is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Goodrx Holdings and Bigcommerce Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bigcommerce Holdings and Goodrx Holdings 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 Goodrx Holdings are associated (or correlated) with Bigcommerce Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bigcommerce Holdings has no effect on the direction of Goodrx Holdings i.e., Goodrx Holdings and Bigcommerce Holdings go up and down completely randomly.

Pair Corralation between Goodrx Holdings and Bigcommerce Holdings

Given the investment horizon of 90 days Goodrx Holdings is expected to under-perform the Bigcommerce Holdings. In addition to that, Goodrx Holdings is 1.1 times more volatile than Bigcommerce Holdings. It trades about -0.18 of its total potential returns per unit of risk. Bigcommerce Holdings is currently generating about 0.15 per unit of volatility. If you would invest  582.00  in Bigcommerce Holdings on September 13, 2024 and sell it today you would earn a total of  188.00  from holding Bigcommerce Holdings or generate 32.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Goodrx Holdings  vs.  Bigcommerce Holdings

Goodrx Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goodrx Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Bigcommerce Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bigcommerce Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Bigcommerce Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goodrx Holdings and Bigcommerce Holdings

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

The idea behind Goodrx Holdings and Bigcommerce Holdings 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.