Correlation Between Roper Technologies, and Blackbaud

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

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

Diversification Opportunities for Roper Technologies, and Blackbaud

0.76

Correlation Coefficient

Roper Technologies,  Blackbaud

Poor diversification

The 3 months correlation between Roper and Blackbaud is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies, and Blackbaud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackbaud and Roper Technologies, 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 Roper Technologies, 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 Roper Technologies, i.e., Roper Technologies, and Blackbaud go up and down completely randomly.

Pair Corralation between Roper Technologies, and Blackbaud

Considering the 90-day investment horizon Roper Technologies, is expected to generate 0.64 times more return on investment than Blackbaud. However, Roper Technologies, is 1.56 times less risky than Blackbaud. It trades about -0.64 of its potential returns per unit of risk. Blackbaud is currently generating about -0.42 per unit of risk. If you would invest  57,595  in Roper Technologies, on October 5, 2024 and sell it today you would lose (6,216) from holding Roper Technologies, or give up 10.79% of portfolio value over 90 days.

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

Roper Technologies,  vs.  Blackbaud

Roper Technologies,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roper Technologies, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Roper Technologies, is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Blackbaud

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Roper Technologies, and Blackbaud

The main advantage of trading using opposite Roper Technologies, and Blackbaud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roper Technologies, 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 Roper Technologies, 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.