Correlation Between BLZ and SOUL

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

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

Diversification Opportunities for BLZ and SOUL

0.55

Correlation Coefficient

BLZ  SOUL

Very weak diversification

The 3 months correlation between BLZ and SOUL is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding BLZ and SOUL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUL and BLZ 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 BLZ are associated (or correlated) with SOUL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUL has no effect on the direction of BLZ i.e., BLZ and SOUL go up and down completely randomly.

Pair Corralation between BLZ and SOUL

Assuming the 90 days trading horizon BLZ is expected to generate 0.69 times more return on investment than SOUL. However, BLZ is 1.46 times less risky than SOUL. It trades about 0.02 of its potential returns per unit of risk. SOUL is currently generating about -0.05 per unit of risk. If you would invest  3.64  in BLZ on May 6, 2025 and sell it today you would lose (0.06) from holding BLZ or give up 1.65% of portfolio value over 90 days.

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

BLZ  vs.  SOUL

BLZ

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BLZ are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, BLZ is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SOUL

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOUL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for SOUL shareholders.

Pair Trading with BLZ and SOUL

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

The idea behind BLZ and SOUL 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.

Check out your portfolio center.

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.