Correlation Between Blackline and Grindr

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

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

Diversification Opportunities for Blackline and Grindr

0.65

Correlation Coefficient

Blackline  Grindr

Poor diversification

The 3 months correlation between Blackline and Grindr is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Blackline and Grindr Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grindr Inc and Blackline 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 Blackline are associated (or correlated) with Grindr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grindr Inc has no effect on the direction of Blackline i.e., Blackline and Grindr go up and down completely randomly.

Pair Corralation between Blackline and Grindr

Allowing for the 90-day total investment horizon Blackline is expected to under-perform the Grindr. But the stock apears to be less risky and, when comparing its historical volatility, Blackline is 1.73 times less risky than Grindr. The stock trades about -0.02 of its potential returns per unit of risk. The Grindr Inc is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  1,520  in Grindr Inc on September 25, 2024 and sell it today you would earn a total of  252.00  from holding Grindr Inc or generate 16.58% return on investment over 90 days.

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

Blackline  vs.  Grindr Inc

Blackline

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Blackline disclosed solid returns over the last few months and may actually be approaching a breakup point.

Grindr Inc

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Grindr Inc are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Grindr exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackline and Grindr

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

The idea behind Blackline and Grindr Inc 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.