Correlation Between Blackline and Amplitude

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

By analyzing existing cross correlation between Blackline and Amplitude, you can compare the effects of market volatilities on Blackline and Amplitude 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 Amplitude. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackline and Amplitude.

Diversification Opportunities for Blackline and Amplitude

-0.33

Correlation Coefficient

Blackline  Amplitude

Very good diversification

The 3 months correlation between Blackline and Amplitude is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Blackline and Amplitude in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplitude 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 Amplitude. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplitude has no effect on the direction of Blackline i.e., Blackline and Amplitude go up and down completely randomly.

Pair Corralation between Blackline and Amplitude

Allowing for the 90-day total investment horizon Blackline is expected to under-perform the Amplitude. But the stock apears to be less risky and, when comparing its historical volatility, Blackline is 1.49 times less risky than Amplitude. The stock trades about -0.1 of its potential returns per unit of risk. The Amplitude is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,053  in Amplitude on December 30, 2024 and sell it today you would earn a total of  2.00  from holding Amplitude or generate 0.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Blackline  vs.  Amplitude

Blackline

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackline has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amplitude

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amplitude are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Amplitude is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Blackline and Amplitude

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

The idea behind Blackline and Amplitude 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.