Correlation Between Eventbrite and Blackline

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

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

Diversification Opportunities for Eventbrite and Blackline

0.84

Correlation Coefficient

Eventbrite  Blackline

Very poor diversification

The 3 months correlation between Eventbrite and Blackline is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Eventbrite Class A and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline and Eventbrite 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 Eventbrite Class A are associated (or correlated) with Blackline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackline has no effect on the direction of Eventbrite i.e., Eventbrite and Blackline go up and down completely randomly.

Pair Corralation between Eventbrite and Blackline

Allowing for the 90-day total investment horizon Eventbrite Class A is expected to under-perform the Blackline. In addition to that, Eventbrite is 2.14 times more volatile than Blackline. It trades about -0.01 of its total potential returns per unit of risk. Blackline is currently generating about 0.19 per unit of volatility. If you would invest  5,853  in Blackline on September 21, 2024 and sell it today you would earn a total of  398.00  from holding Blackline or generate 6.8% return on investment over 90 days.

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

Eventbrite Class A  vs.  Blackline

Eventbrite Class A

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eventbrite Class A are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Eventbrite sustained solid returns over the last few months and may actually be approaching a breakup point.

Blackline

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal essential indicators, Blackline disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eventbrite and Blackline

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

The idea behind Eventbrite Class A and Blackline 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.