Correlation Between Blackline and A10 Network
Can any of the company-specific risk be diversified away by investing in both Blackline and A10 Network 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 Blackline and A10 Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackline and A10 Network, you can compare the effects of market volatilities on Blackline and A10 Network 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 Blackline with a short position of A10 Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackline and A10 Network.
Diversification Opportunities for Blackline and A10 Network
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackline and A10 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Blackline and A10 Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A10 Network and Blackline 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 Blackline are associated (or correlated) with A10 Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A10 Network has no effect on the direction of Blackline i.e., Blackline and A10 Network go up and down completely randomly.
Pair Corralation between Blackline and A10 Network
Allowing for the 90-day total investment horizon Blackline is expected to under-perform the A10 Network. In addition to that, Blackline is 1.72 times more volatile than A10 Network. It trades about -0.03 of its total potential returns per unit of risk. A10 Network is currently generating about -0.04 per unit of volatility. If you would invest 1,369 in A10 Network on January 25, 2024 and sell it today you would lose (22.00) from holding A10 Network or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackline vs. A10 Network
Performance |
| Timeline |
| Blackline |
| A10 Network |
Blackline and A10 Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackline and A10 Network
The main advantage of trading using opposite Blackline and A10 Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackline position performs unexpectedly, A10 Network 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 A10 Network will offset losses from the drop in A10 Network's long position.The idea behind Blackline and A10 Network 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.| A10 Network vs. Sterling Check Corp | A10 Network vs. Repay Holdings Corp | A10 Network vs. SPS Commerce | A10 Network vs. Evertec |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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