Correlation Between Tile Shop and Blink Charging

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

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

Diversification Opportunities for Tile Shop and Blink Charging

0.81

Correlation Coefficient

Tile Shop  Blink Charging

Very poor diversification

The 3 months correlation between Tile and Blink is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Tile Shop Holdings and Blink Charging Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blink Charging and Tile Shop 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 Tile Shop Holdings are associated (or correlated) with Blink Charging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blink Charging has no effect on the direction of Tile Shop i.e., Tile Shop and Blink Charging go up and down completely randomly.

Pair Corralation between Tile Shop and Blink Charging

Given the investment horizon of 90 days Tile Shop is expected to generate 1.27 times less return on investment than Blink Charging. But when comparing it to its historical volatility, Tile Shop Holdings is 1.31 times less risky than Blink Charging. It trades about 0.15 of its potential returns per unit of risk. Blink Charging Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  75.00  in Blink Charging Co on February 10, 2025 and sell it today you would earn a total of  9.00  from holding Blink Charging Co or generate 12.0% return on investment over 90 days.

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

Tile Shop Holdings  vs.  Blink Charging Co

Tile Shop Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tile Shop Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Blink Charging

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Tile Shop and Blink Charging

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

The idea behind Tile Shop Holdings and Blink Charging Co 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.