Correlation Between Blackbird Plc and Intouch Insight

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

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

Diversification Opportunities for Blackbird Plc and Intouch Insight

-0.17

Correlation Coefficient

Blackbird Plc  Intouch Insight

Good diversification

The 3 months correlation between Blackbird and Intouch is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Blackbird plc and Intouch Insight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intouch Insight and Blackbird Plc 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 Blackbird plc are associated (or correlated) with Intouch Insight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intouch Insight has no effect on the direction of Blackbird Plc i.e., Blackbird Plc and Intouch Insight go up and down completely randomly.

Pair Corralation between Blackbird Plc and Intouch Insight

Assuming the 90 days horizon Blackbird plc is expected to generate 2.13 times more return on investment than Intouch Insight. However, Blackbird Plc is 2.13 times more volatile than Intouch Insight. It trades about 0.0 of its potential returns per unit of risk. Intouch Insight is currently generating about -0.05 per unit of risk. If you would invest  6.00  in Blackbird plc on December 30, 2024 and sell it today you would lose (1.00) from holding Blackbird plc or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Blackbird plc  vs.  Intouch Insight

Blackbird plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackbird plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Blackbird Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Intouch Insight

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intouch Insight has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Blackbird Plc and Intouch Insight

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

The idea behind Blackbird plc and Intouch Insight 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.