Correlation Between FlatexDEGIRO and Blackline

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

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

Diversification Opportunities for FlatexDEGIRO and Blackline

0.38

Correlation Coefficient

FlatexDEGIRO  Blackline

Weak diversification

The 3 months correlation between FlatexDEGIRO and Blackline is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding flatexDEGIRO AG and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline and FlatexDEGIRO 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 flatexDEGIRO AG 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 FlatexDEGIRO i.e., FlatexDEGIRO and Blackline go up and down completely randomly.

Pair Corralation between FlatexDEGIRO and Blackline

Assuming the 90 days trading horizon flatexDEGIRO AG is expected to generate 1.08 times more return on investment than Blackline. However, FlatexDEGIRO is 1.08 times more volatile than Blackline. It trades about -0.07 of its potential returns per unit of risk. Blackline is currently generating about -0.5 per unit of risk. If you would invest  1,557  in flatexDEGIRO AG on October 15, 2024 and sell it today you would lose (33.00) from holding flatexDEGIRO AG or give up 2.12% of portfolio value over 90 days.

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

flatexDEGIRO AG  vs.  Blackline

flatexDEGIRO AG

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in flatexDEGIRO AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward-looking signals, FlatexDEGIRO may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Blackline

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Blackline is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FlatexDEGIRO and Blackline

The main advantage of trading using opposite FlatexDEGIRO and Blackline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlatexDEGIRO 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 flatexDEGIRO AG 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.