Correlation Between Intuit and Blackbird Plc

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

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

Diversification Opportunities for Intuit and Blackbird Plc

0.04

Correlation Coefficient

Intuit  Blackbird Plc

Significant diversification

The 3 months correlation between Intuit and Blackbird is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Intuit Inc and Blackbird plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackbird plc and Intuit 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 Intuit Inc are associated (or correlated) with Blackbird Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackbird plc has no effect on the direction of Intuit i.e., Intuit and Blackbird Plc go up and down completely randomly.

Pair Corralation between Intuit and Blackbird Plc

Given the investment horizon of 90 days Intuit Inc is expected to generate 0.34 times more return on investment than Blackbird Plc. However, Intuit Inc is 2.98 times less risky than Blackbird Plc. It trades about -0.08 of its potential returns per unit of risk. Blackbird plc is currently generating about -0.28 per unit of risk. If you would invest  68,787  in Intuit Inc on September 16, 2024 and sell it today you would lose (3,142) from holding Intuit Inc or give up 4.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Intuit Inc  vs.  Blackbird plc

Intuit Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intuit Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Intuit is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Blackbird plc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackbird plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Blackbird Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intuit and Blackbird Plc

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

The idea behind Intuit Inc and Blackbird plc 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.