Correlation Between Expensify and Blackline

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

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

Diversification Opportunities for Expensify and Blackline

0.27

Correlation Coefficient

Expensify  Blackline

Modest diversification

The 3 months correlation between Expensify and Blackline is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline and Expensify 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 Expensify 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 Expensify i.e., Expensify and Blackline go up and down completely randomly.

Pair Corralation between Expensify and Blackline

Given the investment horizon of 90 days Expensify is expected to generate 2.89 times more return on investment than Blackline. However, Expensify is 2.89 times more volatile than Blackline. It trades about 0.13 of its potential returns per unit of risk. Blackline is currently generating about 0.21 per unit of risk. If you would invest  232.00  in Expensify on August 30, 2024 and sell it today you would earn a total of  95.00  from holding Expensify or generate 40.95% return on investment over 90 days.

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

Expensify  vs.  Blackline

Expensify

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Expensify are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Expensify showed solid returns over the last few months and may actually be approaching a breakup point.

Blackline

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Blackline disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Expensify and Blackline

The main advantage of trading using opposite Expensify and Blackline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expensify 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 Expensify 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.