Correlation Between Blackline and Santech Holdings
Can any of the company-specific risk be diversified away by investing in both Blackline and Santech 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 Blackline and Santech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackline and Santech Holdings Limited, you can compare the effects of market volatilities on Blackline and Santech 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 Blackline with a short position of Santech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackline and Santech Holdings.
Diversification Opportunities for Blackline and Santech Holdings
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackline and Santech is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Blackline and Santech Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santech Holdings 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 Santech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santech Holdings has no effect on the direction of Blackline i.e., Blackline and Santech Holdings go up and down completely randomly.
Pair Corralation between Blackline and Santech Holdings
Allowing for the 90-day total investment horizon Blackline is expected to generate 36.2 times less return on investment than Santech Holdings. But when comparing it to its historical volatility, Blackline is 19.38 times less risky than Santech Holdings. It trades about 0.03 of its potential returns per unit of risk. Santech Holdings Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Santech Holdings Limited on August 27, 2024 and sell it today you would lose (31.00) from holding Santech Holdings Limited or give up 22.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackline vs. Santech Holdings Limited
Performance |
| Timeline |
| Blackline |
| Santech Holdings |
Blackline and Santech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackline and Santech Holdings
The main advantage of trading using opposite Blackline and Santech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackline position performs unexpectedly, Santech 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 Santech Holdings will offset losses from the drop in Santech Holdings' long position.The idea behind Blackline and Santech Holdings Limited 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.| Santech Holdings vs. Japan Tobacco ADR | Santech Holdings vs. Diageo PLC ADR | Santech Holdings vs. Compania Cervecerias Unidas | Santech Holdings vs. Willamette Valley Vineyards |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |