Correlation Between ADEIA P and Blackbaud

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

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

Diversification Opportunities for ADEIA P and Blackbaud

0.03

Correlation Coefficient

ADEIA P  Blackbaud

Significant diversification

The 3 months correlation between ADEIA and Blackbaud is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding ADEIA P and Blackbaud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackbaud and ADEIA P 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 ADEIA P 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 ADEIA P i.e., ADEIA P and Blackbaud go up and down completely randomly.

Pair Corralation between ADEIA P and Blackbaud

Given the investment horizon of 90 days ADEIA P is expected to generate 1.64 times more return on investment than Blackbaud. However, ADEIA P is 1.64 times more volatile than Blackbaud. It trades about 0.04 of its potential returns per unit of risk. Blackbaud is currently generating about -0.05 per unit of risk. If you would invest  983.00  in ADEIA P on January 30, 2025 and sell it today you would earn a total of  247.00  from holding ADEIA P or generate 25.13% return on investment over 90 days.

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

ADEIA P  vs.  Blackbaud

ADEIA P

Risk-Adjusted Performance

Very Weak

Over the last 90 days ADEIA P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, ADEIA P is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Blackbaud

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackbaud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ADEIA P and Blackbaud

The main advantage of trading using opposite ADEIA P and Blackbaud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADEIA P 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 ADEIA P 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.