Correlation Between Cognex and Blackbaud

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

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

Diversification Opportunities for Cognex and Blackbaud

0.22

Correlation Coefficient

Cognex  Blackbaud

Modest diversification

The 3 months correlation between Cognex and Blackbaud is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cognex and Blackbaud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackbaud and Cognex 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 Cognex are associated (or correlated) with Blackbaud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackbaud has no effect on the direction of Cognex i.e., Cognex and Blackbaud go up and down completely randomly.

Pair Corralation between Cognex and Blackbaud

Given the investment horizon of 90 days Cognex is expected to generate 1.38 times more return on investment than Blackbaud. However, Cognex is 1.38 times more volatile than Blackbaud. It trades about 0.19 of its potential returns per unit of risk. Blackbaud is currently generating about 0.0 per unit of risk. If you would invest  3,093  in Cognex on May 17, 2025 and sell it today you would earn a total of  1,259  from holding Cognex or generate 40.7% return on investment over 90 days.

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

Cognex  vs.  Blackbaud

Cognex

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cognex are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Cognex showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Cognex and Blackbaud

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

The idea behind Cognex and Blackbaud 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.