Correlation Between BlackBerry and Secureworks Corp

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

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

Diversification Opportunities for BlackBerry and Secureworks Corp

0.29

Correlation Coefficient

BlackBerry  Secureworks Corp

Modest diversification

The 3 months correlation between BlackBerry and Secureworks is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding BlackBerry and Secureworks Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secureworks Corp and BlackBerry 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 BlackBerry are associated (or correlated) with Secureworks Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secureworks Corp has no effect on the direction of BlackBerry i.e., BlackBerry and Secureworks Corp go up and down completely randomly.

Pair Corralation between BlackBerry and Secureworks Corp

Allowing for the 90-day total investment horizon BlackBerry is expected to generate 27.24 times more return on investment than Secureworks Corp. However, BlackBerry is 27.24 times more volatile than Secureworks Corp. It trades about 0.28 of its potential returns per unit of risk. Secureworks Corp is currently generating about 0.2 per unit of risk. If you would invest  257.00  in BlackBerry on September 24, 2024 and sell it today you would earn a total of  113.00  from holding BlackBerry or generate 43.97% return on investment over 90 days.

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

BlackBerry  vs.  Secureworks Corp

BlackBerry

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackBerry are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, BlackBerry sustained solid returns over the last few months and may actually be approaching a breakup point.

Secureworks Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Secureworks Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Secureworks Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with BlackBerry and Secureworks Corp

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

The idea behind BlackBerry and Secureworks Corp 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.