Correlation Between Braze and Blend Labs

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

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

Diversification Opportunities for Braze and Blend Labs

0.46

Correlation Coefficient

Braze  Blend Labs

Very weak diversification

The 3 months correlation between Braze and Blend is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Braze Inc and Blend Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blend Labs 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 Blend Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blend Labs has no effect on the direction of Braze i.e., Braze and Blend Labs go up and down completely randomly.

Pair Corralation between Braze and Blend Labs

Given the investment horizon of 90 days Braze Inc is expected to generate 0.89 times more return on investment than Blend Labs. However, Braze Inc is 1.13 times less risky than Blend Labs. It trades about 0.16 of its potential returns per unit of risk. Blend Labs is currently generating about -0.5 per unit of risk. If you would invest  4,095  in Braze Inc on October 11, 2024 and sell it today you would earn a total of  320.00  from holding Braze Inc or generate 7.81% return on investment over 90 days.

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

Braze Inc  vs.  Blend Labs

Braze Inc

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Braze Inc are ranked lower than 19 (%) 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.

Blend Labs

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blend Labs are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Blend Labs may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Braze and Blend Labs

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

The idea behind Braze Inc and Blend Labs 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.