Correlation Between Blackline and Fair Isaac

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

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

Diversification Opportunities for Blackline and Fair Isaac

0.19

Correlation Coefficient

Blackline  Fair Isaac

Average diversification

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

Pair Corralation between Blackline and Fair Isaac

Allowing for the 90-day total investment horizon Blackline is expected to under-perform the Fair Isaac. In addition to that, Blackline is 1.32 times more volatile than Fair Isaac. It trades about -0.1 of its total potential returns per unit of risk. Fair Isaac is currently generating about -0.06 per unit of volatility. If you would invest  201,365  in Fair Isaac on December 28, 2024 and sell it today you would lose (17,841) from holding Fair Isaac or give up 8.86% of portfolio value over 90 days.

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

Blackline  vs.  Fair Isaac

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.

Fair Isaac

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fair Isaac has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Blackline and Fair Isaac

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

The idea behind Blackline and Fair Isaac 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.