Correlation Between Blackbaud and Quhuo

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

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

Diversification Opportunities for Blackbaud and Quhuo

-0.24

Correlation Coefficient

Blackbaud  Quhuo

Very good diversification

The 3 months correlation between Blackbaud and Quhuo is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and Quhuo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quhuo 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 Quhuo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quhuo has no effect on the direction of Blackbaud i.e., Blackbaud and Quhuo go up and down completely randomly.

Pair Corralation between Blackbaud and Quhuo

Given the investment horizon of 90 days Blackbaud is expected to under-perform the Quhuo. But the stock apears to be less risky and, when comparing its historical volatility, Blackbaud is 1.59 times less risky than Quhuo. The stock trades about -0.42 of its potential returns per unit of risk. The Quhuo is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  131.00  in Quhuo on October 5, 2024 and sell it today you would earn a total of  17.00  from holding Quhuo or generate 12.98% return on investment over 90 days.

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

Blackbaud  vs.  Quhuo

Blackbaud

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackbaud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Quhuo

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quhuo are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Quhuo is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Blackbaud and Quhuo

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

The idea behind Blackbaud and Quhuo 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.