Correlation Between Manhattan Associates and Blackline

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

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

Diversification Opportunities for Manhattan Associates and Blackline

0.59

Correlation Coefficient

Manhattan Associates  Blackline

Very weak diversification

The 3 months correlation between Manhattan and Blackline is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Associates and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline and Manhattan Associates 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 Manhattan Associates are associated (or correlated) with Blackline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackline has no effect on the direction of Manhattan Associates i.e., Manhattan Associates and Blackline go up and down completely randomly.

Pair Corralation between Manhattan Associates and Blackline

Given the investment horizon of 90 days Manhattan Associates is expected to generate 1.57 times less return on investment than Blackline. In addition to that, Manhattan Associates is 1.1 times more volatile than Blackline. It trades about 0.14 of its total potential returns per unit of risk. Blackline is currently generating about 0.24 per unit of volatility. If you would invest  4,835  in Blackline on September 5, 2024 and sell it today you would earn a total of  1,445  from holding Blackline or generate 29.89% return on investment over 90 days.

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

Manhattan Associates  vs.  Blackline

Manhattan Associates

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Manhattan Associates are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Manhattan Associates demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Blackline

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Blackline disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manhattan Associates and Blackline

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

The idea behind Manhattan Associates and Blackline 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.