Correlation Between Blackbaud and Riskified

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

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

Diversification Opportunities for Blackbaud and Riskified

-0.28

Correlation Coefficient

Blackbaud  Riskified

Very good diversification

The 3 months correlation between Blackbaud and Riskified is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and Riskified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riskified 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 Riskified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riskified has no effect on the direction of Blackbaud i.e., Blackbaud and Riskified go up and down completely randomly.

Pair Corralation between Blackbaud and Riskified

Given the investment horizon of 90 days Blackbaud is expected to under-perform the Riskified. But the stock apears to be less risky and, when comparing its historical volatility, Blackbaud is 1.33 times less risky than Riskified. The stock trades about -0.4 of its potential returns per unit of risk. The Riskified is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  488.00  in Riskified on October 4, 2024 and sell it today you would lose (13.00) from holding Riskified or give up 2.66% of portfolio value over 90 days.

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

Blackbaud  vs.  Riskified

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.

Riskified

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Riskified are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, Riskified is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Blackbaud and Riskified

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

The idea behind Blackbaud and Riskified 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.