Correlation Between SSC Technologies and Blackline

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

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

Diversification Opportunities for SSC Technologies and Blackline

0.42

Correlation Coefficient

SSC Technologies  Blackline

Very weak diversification

The 3 months correlation between SSC and Blackline is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SSC Technologies Holdings and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline and SSC Technologies 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 SSC Technologies Holdings are associated (or correlated) with Blackline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackline has no effect on the direction of SSC Technologies i.e., SSC Technologies and Blackline go up and down completely randomly.

Pair Corralation between SSC Technologies and Blackline

Given the investment horizon of 90 days SSC Technologies Holdings is expected to under-perform the Blackline. But the stock apears to be less risky and, when comparing its historical volatility, SSC Technologies Holdings is 1.4 times less risky than Blackline. The stock trades about -0.01 of its potential returns per unit of risk. The Blackline is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  5,198  in Blackline on September 20, 2024 and sell it today you would earn a total of  1,105  from holding Blackline or generate 21.26% return on investment over 90 days.

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

SSC Technologies Holdings  vs.  Blackline

SSC Technologies Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSC Technologies Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SSC Technologies is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Blackline

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Blackline disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSC Technologies and Blackline

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

The idea behind SSC Technologies Holdings and Blackline 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.