Correlation Between Blender Financial and Sure Tech

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

By analyzing existing cross correlation between Blender Financial Technologies and Sure Tech Investments LP, you can compare the effects of market volatilities on Blender Financial and Sure Tech 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 Blender Financial with a short position of Sure Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blender Financial and Sure Tech.

Diversification Opportunities for Blender Financial and Sure Tech

0.38

Correlation Coefficient

Blender Financial  Sure Tech

Weak diversification

The 3 months correlation between Blender and Sure is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Blender Financial Technologies and Sure Tech Investments LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sure Tech Investments and Blender Financial 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 Blender Financial Technologies are associated (or correlated) with Sure Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sure Tech Investments has no effect on the direction of Blender Financial i.e., Blender Financial and Sure Tech go up and down completely randomly.

Pair Corralation between Blender Financial and Sure Tech

Assuming the 90 days trading horizon Blender Financial Technologies is expected to generate 1.38 times more return on investment than Sure Tech. However, Blender Financial is 1.38 times more volatile than Sure Tech Investments LP. It trades about -0.01 of its potential returns per unit of risk. Sure Tech Investments LP is currently generating about -0.04 per unit of risk. If you would invest  36,150  in Blender Financial Technologies on December 30, 2024 and sell it today you would lose (1,120) from holding Blender Financial Technologies or give up 3.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.08%
Values	Daily Returns

Blender Financial Technologies  vs.  Sure Tech Investments LP

Blender Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blender Financial Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Blender Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sure Tech Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sure Tech Investments LP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sure Tech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blender Financial and Sure Tech

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

The idea behind Blender Financial Technologies and Sure Tech Investments LP 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.