Correlation Between Blackbaud and Webstar Technology

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

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

Diversification Opportunities for Blackbaud and Webstar Technology

-0.07

Correlation Coefficient

Blackbaud  Webstar Technology

Good diversification

The 3 months correlation between Blackbaud and Webstar is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and Webstar Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webstar Technology 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 Webstar Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webstar Technology has no effect on the direction of Blackbaud i.e., Blackbaud and Webstar Technology go up and down completely randomly.

Pair Corralation between Blackbaud and Webstar Technology

Given the investment horizon of 90 days Blackbaud is expected to generate 5.61 times less return on investment than Webstar Technology. But when comparing it to its historical volatility, Blackbaud is 2.03 times less risky than Webstar Technology. It trades about 0.01 of its potential returns per unit of risk. Webstar Technology Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Webstar Technology Group on May 18, 2025 and sell it today you would lose (0.10) from holding Webstar Technology Group or give up 2.5% of portfolio value over 90 days.

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

Blackbaud  vs.  Webstar Technology Group

Blackbaud

Risk-Adjusted Performance

Weakest

Over the last 90 days Blackbaud has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Webstar Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Webstar Technology Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Webstar Technology is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Blackbaud and Webstar Technology

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

The idea behind Blackbaud and Webstar Technology Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.