Correlation Between BLZ and Virtual Protocol

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

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

Diversification Opportunities for BLZ and Virtual Protocol

0.55

Correlation Coefficient

BLZ  Virtual Protocol

Very weak diversification

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

Pair Corralation between BLZ and Virtual Protocol

Assuming the 90 days trading horizon BLZ is expected to generate 0.58 times more return on investment than Virtual Protocol. However, BLZ is 1.72 times less risky than Virtual Protocol. It trades about -0.01 of its potential returns per unit of risk. Virtual Protocol is currently generating about -0.04 per unit of risk. If you would invest  4.26  in BLZ on May 12, 2025 and sell it today you would lose (0.34) from holding BLZ or give up 7.98% of portfolio value over 90 days.

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

BLZ  vs.  Virtual Protocol

BLZ

Risk-Adjusted Performance

Weakest

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

Virtual Protocol

Risk-Adjusted Performance

Weakest

Over the last 90 days Virtual Protocol has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Crypto's basic indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for Virtual Protocol institutional investors.

Pair Trading with BLZ and Virtual Protocol

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

The idea behind BLZ and Virtual Protocol 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.