Correlation Between Blackline and Climb Global

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

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

Diversification Opportunities for Blackline and Climb Global

0.19

Correlation Coefficient

Blackline  Climb Global

Average diversification

The 3 months correlation between Blackline and Climb is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Blackline and Climb Global Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Climb Global Solutions 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 Climb Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Climb Global Solutions has no effect on the direction of Blackline i.e., Blackline and Climb Global go up and down completely randomly.

Pair Corralation between Blackline and Climb Global

Allowing for the 90-day total investment horizon Blackline is expected to under-perform the Climb Global. In addition to that, Blackline is 1.32 times more volatile than Climb Global Solutions. It trades about -0.05 of its total potential returns per unit of risk. Climb Global Solutions is currently generating about -0.01 per unit of volatility. If you would invest  13,369  in Climb Global Solutions on November 19, 2024 and sell it today you would lose (431.00) from holding Climb Global Solutions or give up 3.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Blackline  vs.  Climb Global Solutions

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 latest inconsistent performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Climb Global Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Climb Global Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Climb Global is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackline and Climb Global

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

The idea behind Blackline and Climb Global Solutions 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.