Correlation Between E2open Parent and Blackbaud

Can any of the company-specific risk be diversified away by investing in both E2open Parent 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 E2open Parent and Blackbaud into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between E2open Parent Holdings and Blackbaud, you can compare the effects of market volatilities on E2open Parent 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 E2open Parent with a short position of Blackbaud. Check out your portfolio center. Please also check ongoing floating volatility patterns of E2open Parent and Blackbaud.

Diversification Opportunities for E2open Parent and Blackbaud

0.33

Correlation Coefficient

E2open Parent  Blackbaud

Weak diversification

The 3 months correlation between E2open and Blackbaud is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding E2open Parent Holdings and Blackbaud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackbaud and E2open Parent 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 E2open Parent Holdings 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 E2open Parent i.e., E2open Parent and Blackbaud go up and down completely randomly.

Pair Corralation between E2open Parent and Blackbaud

Given the investment horizon of 90 days E2open Parent Holdings is expected to under-perform the Blackbaud. But the stock apears to be less risky and, when comparing its historical volatility, E2open Parent Holdings is 1.11 times less risky than Blackbaud. The stock trades about -0.3 of its potential returns per unit of risk. The Blackbaud is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest  7,809  in Blackbaud on November 28, 2024 and sell it today you would lose (1,219) from holding Blackbaud or give up 15.61% of portfolio value over 90 days.

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

E2open Parent Holdings  vs.  Blackbaud

E2open Parent Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days E2open Parent Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Blackbaud

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackbaud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with E2open Parent and Blackbaud

The main advantage of trading using opposite E2open Parent and Blackbaud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E2open Parent 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 E2open Parent Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.