Correlation Between Super Micro and Blackline

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

Diversification Opportunities for Super Micro and Blackline

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Super and Blackline is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Super Micro Computer and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline and Super Micro 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 Super Micro Computer 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 Super Micro i.e., Super Micro and Blackline go up and down completely randomly.

Pair Corralation between Super Micro and Blackline

Given the investment horizon of 90 days Super Micro Computer is expected to generate 1.08 times more return on investment than Blackline. However, Super Micro is 1.08 times more volatile than Blackline. It trades about 0.08 of its potential returns per unit of risk. Blackline is currently generating about -0.03 per unit of risk. If you would invest  3,034  in Super Micro Computer on August 31, 2022 and sell it today you would earn a total of  6,115  from holding Super Micro Computer or generate 201.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Super Micro Computer  vs.  Blackline

 Performance (%) 
       Timeline  
Super Micro Computer 
Super Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Super Micro Computer are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Super Micro reported solid returns over the last few months and may actually be approaching a breakup point.

Super 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 relatively steady essential indicators, Blackline is not utilizing all of its potentials. The new stock price chaos, may contribute to medium-term losses for the stakeholders.

Blackline Price Channel

Super Micro and Blackline Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Super Micro and Blackline

The main advantage of trading using opposite Super Micro and Blackline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Micro 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 Super Micro Computer 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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