Correlation Between Blackbaud and Hitek Global

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

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

Diversification Opportunities for Blackbaud and Hitek Global

0.15

Correlation Coefficient

Blackbaud  Hitek Global

Average diversification

The 3 months correlation between Blackbaud and Hitek is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and Hitek Global Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitek Global Ordinary 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 Hitek Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitek Global Ordinary has no effect on the direction of Blackbaud i.e., Blackbaud and Hitek Global go up and down completely randomly.

Pair Corralation between Blackbaud and Hitek Global

Given the investment horizon of 90 days Blackbaud is expected to under-perform the Hitek Global. But the stock apears to be less risky and, when comparing its historical volatility, Blackbaud is 1.58 times less risky than Hitek Global. The stock trades about -0.23 of its potential returns per unit of risk. The Hitek Global Ordinary is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  129.00  in Hitek Global Ordinary on December 2, 2024 and sell it today you would lose (7.00) from holding Hitek Global Ordinary or give up 5.43% of portfolio value over 90 days.

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

Blackbaud  vs.  Hitek Global Ordinary

Blackbaud

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackbaud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hitek Global Ordinary

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hitek Global Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Hitek Global is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Blackbaud and Hitek Global

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

The idea behind Blackbaud and Hitek Global Ordinary 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.