Correlation Between Blackbaud and NeoMedia Technologies

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

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

Diversification Opportunities for Blackbaud and NeoMedia Technologies

0.19

Correlation Coefficient

Blackbaud  NeoMedia Technologies

Average diversification

The 3 months correlation between Blackbaud and NeoMedia is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and NeoMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeoMedia Technologies and Blackbaud 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 Blackbaud are associated (or correlated) with NeoMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeoMedia Technologies has no effect on the direction of Blackbaud i.e., Blackbaud and NeoMedia Technologies go up and down completely randomly.

Pair Corralation between Blackbaud and NeoMedia Technologies

If you would invest  0.01  in NeoMedia Technologies on September 14, 2024 and sell it today you would earn a total of  0.00  from holding NeoMedia Technologies or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Blackbaud  vs.  NeoMedia Technologies

Blackbaud

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackbaud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Blackbaud is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

NeoMedia Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NeoMedia Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, NeoMedia Technologies is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blackbaud and NeoMedia Technologies

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

The idea behind Blackbaud and NeoMedia Technologies 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.