Correlation Between Remitly Global and Backblaze

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

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

Diversification Opportunities for Remitly Global and Backblaze

0.9

Correlation Coefficient

Remitly Global  Backblaze

Almost no diversification

The 3 months correlation between Remitly and Backblaze is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Remitly Global and Backblaze in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Backblaze and Remitly Global 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 Remitly Global are associated (or correlated) with Backblaze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Backblaze has no effect on the direction of Remitly Global i.e., Remitly Global and Backblaze go up and down completely randomly.

Pair Corralation between Remitly Global and Backblaze

Given the investment horizon of 90 days Remitly Global is expected to generate 0.58 times more return on investment than Backblaze. However, Remitly Global is 1.72 times less risky than Backblaze. It trades about -0.05 of its potential returns per unit of risk. Backblaze is currently generating about -0.07 per unit of risk. If you would invest  2,270  in Remitly Global on December 30, 2024 and sell it today you would lose (177.00) from holding Remitly Global or give up 7.8% of portfolio value over 90 days.

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

Remitly Global  vs.  Backblaze

Remitly Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Remitly Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Backblaze

Risk-Adjusted Performance

Very Weak

Over the last 90 days Backblaze has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Remitly Global and Backblaze

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

The idea behind Remitly Global and Backblaze 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.