Correlation Between Black Knight and Fair Isaac
Can any of the company-specific risk be diversified away by investing in both Black Knight and Fair Isaac 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 Black Knight and Fair Isaac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Knight and Fair Isaac, you can compare the effects of market volatilities on Black Knight and Fair Isaac 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 Black Knight with a short position of Fair Isaac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Knight and Fair Isaac.
Diversification Opportunities for Black Knight and Fair Isaac
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Black and Fair is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Black Knight and Fair Isaac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac and Black Knight 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 Black Knight are associated (or correlated) with Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac has no effect on the direction of Black Knight i.e., Black Knight and Fair Isaac go up and down completely randomly.
Pair Corralation between Black Knight and Fair Isaac
Considering the 90-day investment horizon Black Knight is expected to generate 8.37 times less return on investment than Fair Isaac. But when comparing it to its historical volatility, Black Knight is 1.45 times less risky than Fair Isaac. It trades about 0.02 of its potential returns per unit of risk. Fair Isaac is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 34,989 in Fair Isaac on January 26, 2024 and sell it today you would earn a total of 84,314 from holding Fair Isaac or generate 240.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 67.61% |
| Values | Daily Returns |
Black Knight vs. Fair Isaac
Performance |
| Timeline |
| Black Knight |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fair Isaac |
Black Knight and Fair Isaac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Knight and Fair Isaac
The main advantage of trading using opposite Black Knight and Fair Isaac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Knight position performs unexpectedly, Fair Isaac 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 Fair Isaac will offset losses from the drop in Fair Isaac's long position.| Black Knight vs. Paylocity Holdng | Black Knight vs. Paycor HCM | Black Knight vs. Blackbaud | Black Knight vs. Clearwater Analytics Holdings |
Check out your portfolio center.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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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