Correlation Between Blackbaud and VERB TECHNOLOGY

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

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

Diversification Opportunities for Blackbaud and VERB TECHNOLOGY

-0.37

Correlation Coefficient

Blackbaud  VERB TECHNOLOGY

Very good diversification

The 3 months correlation between Blackbaud and VERB is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and VERB TECHNOLOGY PANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERB TECHNOLOGY PANY and Blackbaud 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 Blackbaud are associated (or correlated) with VERB TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERB TECHNOLOGY PANY has no effect on the direction of Blackbaud i.e., Blackbaud and VERB TECHNOLOGY go up and down completely randomly.

Pair Corralation between Blackbaud and VERB TECHNOLOGY

Given the investment horizon of 90 days Blackbaud is expected to generate 6.71 times less return on investment than VERB TECHNOLOGY. But when comparing it to its historical volatility, Blackbaud is 16.88 times less risky than VERB TECHNOLOGY. It trades about 0.14 of its potential returns per unit of risk. VERB TECHNOLOGY PANY is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  17.00  in VERB TECHNOLOGY PANY on February 20, 2024 and sell it today you would lose (3.00) from holding VERB TECHNOLOGY PANY or give up 17.65% of portfolio value over 90 days.

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

Blackbaud  vs.  VERB TECHNOLOGY PANY

Blackbaud

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackbaud are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking signals, Blackbaud sustained solid returns over the last few months and may actually be approaching a breakup point.

VERB TECHNOLOGY PANY

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VERB TECHNOLOGY PANY are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, VERB TECHNOLOGY sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackbaud and VERB TECHNOLOGY

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

The idea behind Blackbaud and VERB TECHNOLOGY PANY 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.