Correlation Between Black Knight and Informatica Inc

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

Diversification Opportunities for Black Knight and Informatica Inc

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Black and Informatica is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Black Knight and Informatica Inc Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Informatica Inc and Black Knight 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 Black Knight are associated (or correlated) with Informatica Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Informatica Inc has no effect on the direction of Black Knight i.e., Black Knight and Informatica Inc go up and down completely randomly.

Pair Corralation between Black Knight and Informatica Inc

Considering the 90-day investment horizon Black Knight is expected to generate 2.77 times less return on investment than Informatica Inc. But when comparing it to its historical volatility, Black Knight is 2.38 times less risky than Informatica Inc. It trades about 0.15 of its potential returns per unit of risk. Informatica Inc Cl is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,926  in Informatica Inc Cl on May 19, 2022 and sell it today you would earn a total of  425.00  from holding Informatica Inc Cl or generate 22.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.56%
ValuesDaily Returns

Black Knight  vs.  Informatica Inc Cl

 Performance (%) 
       Timeline  
Black Knight 
Black Performance
0 of 100
Over the last 90 days Black Knight has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Black Knight is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Black Price Channel

Informatica Inc 
Informatica Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Informatica Inc Cl are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat sluggish technical and fundamental indicators, Informatica Inc sustained solid returns over the last few months and may actually be approaching a breakup point.

Informatica Price Channel

Black Knight and Informatica Inc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Black Knight and Informatica Inc

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

Informatica Inc Cl

Pair trading matchups for Informatica Inc

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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