Correlation Between Verint Systems and Backblaze

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

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

Diversification Opportunities for Verint Systems and Backblaze

-0.57

Correlation Coefficient

Verint Systems  Backblaze

Excellent diversification

The 3 months correlation between Verint and Backblaze is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Verint Systems and Backblaze in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Backblaze and Verint Systems 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 Verint Systems 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 Verint Systems i.e., Verint Systems and Backblaze go up and down completely randomly.

Pair Corralation between Verint Systems and Backblaze

Given the investment horizon of 90 days Verint Systems is expected to under-perform the Backblaze. But the stock apears to be less risky and, when comparing its historical volatility, Verint Systems is 1.43 times less risky than Backblaze. The stock trades about -0.15 of its potential returns per unit of risk. The Backblaze is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  611.00  in Backblaze on August 30, 2024 and sell it today you would earn a total of  34.00  from holding Backblaze or generate 5.56% return on investment over 90 days.

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

Verint Systems  vs.  Backblaze

Verint Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Verint Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Backblaze

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Backblaze are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Backblaze may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Verint Systems and Backblaze

The main advantage of trading using opposite Verint Systems and Backblaze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verint Systems 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 Verint Systems 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.