Correlation Between Blackbaud and Aware
Can any of the company-specific risk be diversified away by investing in both Blackbaud and Aware 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 Blackbaud and Aware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackbaud and Aware Inc, you can compare the effects of market volatilities on Blackbaud and Aware 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 Blackbaud with a short position of Aware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackbaud and Aware.
Diversification Opportunities for Blackbaud and Aware
Good diversification
The 3 months correlation between Blackbaud and Aware is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and Aware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aware Inc and Blackbaud 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 Blackbaud are associated (or correlated) with Aware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aware Inc has no effect on the direction of Blackbaud i.e., Blackbaud and Aware go up and down completely randomly.
Pair Corralation between Blackbaud and Aware
Given the investment horizon of 90 days Blackbaud is expected to generate 0.7 times more return on investment than Aware. However, Blackbaud is 1.42 times less risky than Aware. It trades about 0.04 of its potential returns per unit of risk. Aware Inc is currently generating about -0.16 per unit of risk. If you would invest 8,621 in Blackbaud on August 28, 2024 and sell it today you would earn a total of 126.00 from holding Blackbaud or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Blackbaud vs. Aware Inc
Performance |
| Timeline |
| Blackbaud |
| Aware Inc |
Blackbaud and Aware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackbaud and Aware
The main advantage of trading using opposite Blackbaud and Aware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackbaud position performs unexpectedly, Aware 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 Aware will offset losses from the drop in Aware's long position.The idea behind Blackbaud and Aware Inc 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.| Aware vs. Xcelmobility | Aware vs. Pushfor Investments | Aware vs. CurrentC Power | Aware vs. Agent Information Software |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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