Correlation Between BLZ and Solana

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

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

Diversification Opportunities for BLZ and Solana

0.52

Correlation Coefficient

BLZ  Solana

Very weak diversification

The 3 months correlation between BLZ and Solana is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding BLZ and Solana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solana 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 Solana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solana has no effect on the direction of BLZ i.e., BLZ and Solana go up and down completely randomly.

Pair Corralation between BLZ and Solana

Assuming the 90 days trading horizon BLZ is expected to generate 2.39 times more return on investment than Solana. However, BLZ is 2.39 times more volatile than Solana. It trades about 0.0 of its potential returns per unit of risk. Solana is currently generating about -0.07 per unit of risk. If you would invest  5.40  in BLZ on December 29, 2024 and sell it today you would lose (2.10) from holding BLZ or give up 38.89% of portfolio value over 90 days.

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

BLZ  vs.  Solana

BLZ

Risk-Adjusted Performance

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 rather sound basic indicators, BLZ is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Solana

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solana 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 essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Solana shareholders.

Pair Trading with BLZ and Solana

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

The idea behind BLZ and Solana 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.