Correlation Between Braze and Blackbaud

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

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

Diversification Opportunities for Braze and Blackbaud

-0.53

Correlation Coefficient

Braze  Blackbaud

Excellent diversification

The 3 months correlation between Braze and Blackbaud is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Braze Inc and Blackbaud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackbaud and Braze 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 Braze Inc are associated (or correlated) with Blackbaud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackbaud has no effect on the direction of Braze i.e., Braze and Blackbaud go up and down completely randomly.

Pair Corralation between Braze and Blackbaud

Given the investment horizon of 90 days Braze Inc is expected to generate 1.6 times more return on investment than Blackbaud. However, Braze is 1.6 times more volatile than Blackbaud. It trades about 0.04 of its potential returns per unit of risk. Blackbaud is currently generating about 0.03 per unit of risk. If you would invest  3,080  in Braze Inc on October 9, 2024 and sell it today you would earn a total of  1,479  from holding Braze Inc or generate 48.02% return on investment over 90 days.

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

Braze Inc  vs.  Blackbaud

Braze Inc

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Braze Inc are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Braze exhibited solid returns over the last few months and may actually be approaching a breakup point.

Blackbaud

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackbaud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Blackbaud is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Braze and Blackbaud

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

The idea behind Braze Inc and Blackbaud 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.