Correlation Between Blackline and Baijiayun

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

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

Diversification Opportunities for Blackline and Baijiayun

0.7

Correlation Coefficient

Blackline  Baijiayun

Poor diversification

The 3 months correlation between Blackline and Baijiayun is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Blackline and Baijiayun Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baijiayun 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 Baijiayun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baijiayun Group has no effect on the direction of Blackline i.e., Blackline and Baijiayun go up and down completely randomly.

Pair Corralation between Blackline and Baijiayun

Allowing for the 90-day total investment horizon Blackline is expected to generate 0.56 times more return on investment than Baijiayun. However, Blackline is 1.78 times less risky than Baijiayun. It trades about 0.23 of its potential returns per unit of risk. Baijiayun Group is currently generating about 0.13 per unit of risk. If you would invest  4,851  in Blackline on August 31, 2024 and sell it today you would earn a total of  1,337  from holding Blackline or generate 27.56% return on investment over 90 days.

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

Blackline  vs.  Baijiayun Group

Blackline

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 17 (%) 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.

Baijiayun Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baijiayun Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Baijiayun exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackline and Baijiayun

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

The idea behind Blackline and Baijiayun Group 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.