Correlation Between Blackbaud and Telos Corp

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

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

Diversification Opportunities for Blackbaud and Telos Corp

0.84

Correlation Coefficient

Blackbaud  Telos Corp

Very poor diversification

The 3 months correlation between Blackbaud and Telos is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and Telos Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telos Corp 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 Telos Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telos Corp has no effect on the direction of Blackbaud i.e., Blackbaud and Telos Corp go up and down completely randomly.

Pair Corralation between Blackbaud and Telos Corp

Given the investment horizon of 90 days Blackbaud is expected to generate 0.58 times more return on investment than Telos Corp. However, Blackbaud is 1.74 times less risky than Telos Corp. It trades about -0.12 of its potential returns per unit of risk. Telos Corp is currently generating about -0.13 per unit of risk. If you would invest  7,380  in Blackbaud on December 29, 2024 and sell it today you would lose (1,148) from holding Blackbaud or give up 15.56% of portfolio value over 90 days.

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

Blackbaud  vs.  Telos Corp

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.

Telos Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telos Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Blackbaud and Telos Corp

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

The idea behind Blackbaud and Telos Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..