Correlation Between Arbe Robotics and Blackline

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Can any of the company-specific risk be diversified away by investing in both Arbe Robotics 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 Arbe Robotics and Blackline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbe Robotics and Blackline, you can compare the effects of market volatilities on Arbe Robotics 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 Arbe Robotics with a short position of Blackline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbe Robotics and Blackline.

Diversification Opportunities for Arbe Robotics and Blackline

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Arbe Robotics and Blackline is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Arbe Robotics and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline and Arbe Robotics 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 Arbe Robotics 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 Arbe Robotics i.e., Arbe Robotics and Blackline go up and down completely randomly.

Pair Corralation between Arbe Robotics and Blackline

Given the investment horizon of 90 days Arbe Robotics is expected to under-perform the Blackline. In addition to that, Arbe Robotics is 1.17 times more volatile than Blackline. It trades about -0.01 of its total potential returns per unit of risk. Blackline is currently generating about -0.02 per unit of volatility. If you would invest  10,100  in Blackline on July 8, 2022 and sell it today you would lose (3,581)  from holding Blackline or give up 35.46% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy97.99%
ValuesDaily Returns

Arbe Robotics  vs.  Blackline

 Performance (%) 
       Timeline  
Arbe Robotics 
Arbe Robotics Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Arbe Robotics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Arbe Robotics may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Arbe Robotics Price Channel

Blackline 
Blackline Performance
0 of 100
Over the last 90 days Blackline has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's essential indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Blackline Price Channel

Arbe Robotics and Blackline Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Arbe Robotics and Blackline

The main advantage of trading using opposite Arbe Robotics and Blackline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbe Robotics 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.
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The idea behind Arbe Robotics 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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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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