Correlation Between Blackline and Wag Group

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

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

Diversification Opportunities for Blackline and Wag Group

-0.75

Correlation Coefficient

Blackline  Wag Group

Pay attention - limited upside

The 3 months correlation between Blackline and Wag is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Blackline and Wag Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wag Group 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 Wag Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wag Group has no effect on the direction of Blackline i.e., Blackline and Wag Group go up and down completely randomly.

Pair Corralation between Blackline and Wag Group

Allowing for the 90-day total investment horizon Blackline is expected to generate 362.24 times less return on investment than Wag Group. But when comparing it to its historical volatility, Blackline is 56.19 times less risky than Wag Group. It trades about 0.02 of its potential returns per unit of risk. Wag Group Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Wag Group Co on September 5, 2024 and sell it today you would lose (10.50) from holding Wag Group Co or give up 87.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	71.37%
Values	Daily Returns

Blackline  vs.  Wag Group Co

Blackline

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Blackline disclosed solid returns over the last few months and may actually be approaching a breakup point.

Wag Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wag Group Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Wag Group is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Blackline and Wag Group

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

The idea behind Blackline and Wag Group Co 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.