Correlation Between Blackline and Blend Labs
Can any of the company-specific risk be diversified away by investing in both Blackline and Blend Labs 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 Blackline and Blend Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackline and Blend Labs, you can compare the effects of market volatilities on Blackline and Blend Labs 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 Blackline with a short position of Blend Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackline and Blend Labs.
Diversification Opportunities for Blackline and Blend Labs
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackline and Blend is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Blackline and Blend Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blend Labs and Blackline 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 Blackline are associated (or correlated) with Blend Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blend Labs has no effect on the direction of Blackline i.e., Blackline and Blend Labs go up and down completely randomly.
Pair Corralation between Blackline and Blend Labs
Allowing for the 90-day total investment horizon Blackline is expected to generate 0.65 times more return on investment than Blend Labs. However, Blackline is 1.54 times less risky than Blend Labs. It trades about 0.12 of its potential returns per unit of risk. Blend Labs is currently generating about 0.06 per unit of risk. If you would invest 6,033 in Blackline on November 2, 2024 and sell it today you would earn a total of 311.00 from holding Blackline or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackline vs. Blend Labs
Performance |
| Timeline |
| Blackline |
| Blend Labs |
Blackline and Blend Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackline and Blend Labs
The main advantage of trading using opposite Blackline and Blend Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackline position performs unexpectedly, Blend Labs 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 Blend Labs will offset losses from the drop in Blend Labs' long position.| Blackline vs. Manhattan Associates | Blackline vs. Aspen Technology | Blackline vs. DoubleVerify Holdings | Blackline vs. ANSYS Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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