Correlation Between NetScout Systems and Blackbaud

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

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

Diversification Opportunities for NetScout Systems and Blackbaud

-0.15

Correlation Coefficient

NetScout Systems  Blackbaud

Good diversification

The 3 months correlation between NetScout and Blackbaud is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding NetScout Systems and Blackbaud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackbaud and NetScout Systems 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 NetScout Systems 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 NetScout Systems i.e., NetScout Systems and Blackbaud go up and down completely randomly.

Pair Corralation between NetScout Systems and Blackbaud

Given the investment horizon of 90 days NetScout Systems is expected to under-perform the Blackbaud. But the stock apears to be less risky and, when comparing its historical volatility, NetScout Systems is 1.35 times less risky than Blackbaud. The stock trades about -0.02 of its potential returns per unit of risk. The Blackbaud is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6,212  in Blackbaud on May 21, 2025 and sell it today you would earn a total of  219.00  from holding Blackbaud or generate 3.53% return on investment over 90 days.

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

NetScout Systems  vs.  Blackbaud

NetScout Systems

Risk-Adjusted Performance

Weakest

Over the last 90 days NetScout Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, NetScout Systems is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Blackbaud

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackbaud are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 NetScout Systems and Blackbaud

The main advantage of trading using opposite NetScout Systems and Blackbaud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetScout Systems 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 NetScout Systems 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.