Correlation Between BLZ and Morpho

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

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

Diversification Opportunities for BLZ and Morpho

-0.75

Correlation Coefficient

BLZ  Morpho

Pay attention - limited upside

The 3 months correlation between BLZ and Morpho is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding BLZ and Morpho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morpho and BLZ 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 BLZ are associated (or correlated) with Morpho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morpho has no effect on the direction of BLZ i.e., BLZ and Morpho go up and down completely randomly.

Pair Corralation between BLZ and Morpho

Assuming the 90 days trading horizon BLZ is expected to under-perform the Morpho. But the crypto coin apears to be less risky and, when comparing its historical volatility, BLZ is 9.52 times less risky than Morpho. The crypto coin trades about -0.08 of its potential returns per unit of risk. The Morpho is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Morpho on October 8, 2024 and sell it today you would earn a total of  326.00  from holding Morpho or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.96%
Values	Daily Returns

BLZ  vs.  Morpho

BLZ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BLZ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for BLZ shareholders.

Morpho

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morpho are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Morpho sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BLZ and Morpho

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

The idea behind BLZ and Morpho 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.