Correlation Between Blackline Safety and CurrentC Power

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

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

Diversification Opportunities for Blackline Safety and CurrentC Power

0.05

Correlation Coefficient

Blackline Safety  CurrentC Power

Significant diversification

The 3 months correlation between Blackline and CurrentC is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Blackline Safety Corp and CurrentC Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CurrentC Power and Blackline Safety 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 Blackline Safety Corp are associated (or correlated) with CurrentC Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CurrentC Power has no effect on the direction of Blackline Safety i.e., Blackline Safety and CurrentC Power go up and down completely randomly.

Pair Corralation between Blackline Safety and CurrentC Power

Assuming the 90 days horizon Blackline Safety is expected to generate 192.08 times less return on investment than CurrentC Power. But when comparing it to its historical volatility, Blackline Safety Corp is 38.78 times less risky than CurrentC Power. It trades about 0.04 of its potential returns per unit of risk. CurrentC Power is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  18.00  in CurrentC Power on December 22, 2024 and sell it today you would lose (14.40) from holding CurrentC Power or give up 80.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Blackline Safety Corp  vs.  CurrentC Power

Blackline Safety Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline Safety Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Blackline Safety may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CurrentC Power

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CurrentC Power are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, CurrentC Power showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackline Safety and CurrentC Power

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

The idea behind Blackline Safety Corp and CurrentC Power 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.