Correlation Between Blackbaud and Radware

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

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

Diversification Opportunities for Blackbaud and Radware

0.53

Correlation Coefficient

Blackbaud  Radware

Very weak diversification

The 3 months correlation between Blackbaud and Radware is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and Radware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radware 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 Radware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radware has no effect on the direction of Blackbaud i.e., Blackbaud and Radware go up and down completely randomly.

Pair Corralation between Blackbaud and Radware

Given the investment horizon of 90 days Blackbaud is expected to generate 0.95 times more return on investment than Radware. However, Blackbaud is 1.06 times less risky than Radware. It trades about 0.14 of its potential returns per unit of risk. Radware is currently generating about 0.11 per unit of risk. If you would invest  6,109  in Blackbaud on May 1, 2025 and sell it today you would earn a total of  1,052  from holding Blackbaud or generate 17.22% return on investment over 90 days.

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

Blackbaud  vs.  Radware

Blackbaud

Risk-Adjusted Performance

Modest

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 uncertain forward-looking signals, Blackbaud sustained solid returns over the last few months and may actually be approaching a breakup point.

Radware

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Radware are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Radware reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackbaud and Radware

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

The idea behind Blackbaud and Radware 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.