Correlation Between Blackbaud and DHI
Can any of the company-specific risk be diversified away by investing in both Blackbaud and DHI 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 DHI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackbaud and DHI Group, you can compare the effects of market volatilities on Blackbaud and DHI 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 DHI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackbaud and DHI.
Diversification Opportunities for Blackbaud and DHI
Very good diversification
The 3 months correlation between Blackbaud and DHI is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group 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 DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of Blackbaud i.e., Blackbaud and DHI go up and down completely randomly.
Pair Corralation between Blackbaud and DHI
Given the investment horizon of 90 days Blackbaud is expected to generate 12.97 times less return on investment than DHI. But when comparing it to its historical volatility, Blackbaud is 4.41 times less risky than DHI. It trades about 0.22 of its potential returns per unit of risk. DHI Group is currently generating about 0.64 of returns per unit of risk over similar time horizon. If you would invest 175.00 in DHI Group on November 2, 2024 and sell it today you would earn a total of 121.00 from holding DHI Group or generate 69.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackbaud vs. DHI Group
Performance |
| Timeline |
| Blackbaud |
| DHI Group |
Blackbaud and DHI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackbaud and DHI
The main advantage of trading using opposite Blackbaud and DHI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackbaud position performs unexpectedly, DHI 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 DHI will offset losses from the drop in DHI's long position.| Blackbaud vs. Progress Software | Blackbaud vs. Enfusion | Blackbaud vs. E2open Parent Holdings | Blackbaud vs. Aspen Technology |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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