Correlation Between Blackbaud and MaxLinear

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

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

Diversification Opportunities for Blackbaud and MaxLinear

0.61

Correlation Coefficient

Blackbaud  MaxLinear

Poor diversification

The 3 months correlation between Blackbaud and MaxLinear is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and MaxLinear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MaxLinear 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 MaxLinear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MaxLinear has no effect on the direction of Blackbaud i.e., Blackbaud and MaxLinear go up and down completely randomly.

Pair Corralation between Blackbaud and MaxLinear

Given the investment horizon of 90 days Blackbaud is expected to generate 15.91 times less return on investment than MaxLinear. But when comparing it to its historical volatility, Blackbaud is 1.98 times less risky than MaxLinear. It trades about 0.03 of its potential returns per unit of risk. MaxLinear is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,015  in MaxLinear on April 28, 2025 and sell it today you would earn a total of  621.00  from holding MaxLinear or generate 61.18% return on investment over 90 days.

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

Blackbaud  vs.  MaxLinear

Blackbaud

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackbaud are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Blackbaud is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

MaxLinear

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MaxLinear are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, MaxLinear disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackbaud and MaxLinear

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

The idea behind Blackbaud and MaxLinear 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.