Correlation Between Blackbaud and Calix

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

By analyzing existing cross correlation between Blackbaud and Calix Inc, you can compare the effects of market volatilities on Blackbaud and Calix 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 Blackbaud with a short position of Calix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackbaud and Calix.

Diversification Opportunities for Blackbaud and Calix

0.11

Correlation Coefficient

Blackbaud  Calix

Average diversification

The 3 months correlation between Blackbaud and Calix is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and Calix Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calix Inc and Blackbaud 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 Blackbaud are associated (or correlated) with Calix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calix Inc has no effect on the direction of Blackbaud i.e., Blackbaud and Calix go up and down completely randomly.

Pair Corralation between Blackbaud and Calix

Given the investment horizon of 90 days Blackbaud is expected to generate 0.86 times more return on investment than Calix. However, Blackbaud is 1.17 times less risky than Calix. It trades about 0.03 of its potential returns per unit of risk. Calix Inc is currently generating about -0.05 per unit of risk. If you would invest  8,186  in Blackbaud on September 3, 2024 and sell it today you would earn a total of  208.00  from holding Blackbaud or generate 2.54% return on investment over 90 days.

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

Blackbaud  vs.  Calix Inc

Blackbaud

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackbaud are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Blackbaud is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Calix Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calix Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Blackbaud and Calix

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

The idea behind Blackbaud and Calix Inc 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.