Correlation Between Black Diamond and American Video

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

By analyzing existing cross correlation between Black Diamond Group and American Video Teleconferencing, you can compare the effects of market volatilities on Black Diamond and American Video 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 Diamond with a short position of American Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Diamond and American Video.

Diversification Opportunities for Black Diamond and American Video

0.0

Correlation Coefficient

Black Diamond  American Video

Pay attention - limited upside

The 3 months correlation between Black and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Black Diamond Group and American Video Teleconferencin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Video Telec and Black Diamond 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 Diamond Group are associated (or correlated) with American Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Video Telec has no effect on the direction of Black Diamond i.e., Black Diamond and American Video go up and down completely randomly.

Pair Corralation between Black Diamond and American Video

Assuming the 90 days horizon Black Diamond Group is expected to generate 0.99 times more return on investment than American Video. However, Black Diamond Group is 1.01 times less risky than American Video. It trades about 0.08 of its potential returns per unit of risk. American Video Teleconferencing is currently generating about -0.02 per unit of risk. If you would invest  355.00  in Black Diamond Group on February 28, 2024 and sell it today you would earn a total of  225.00  from holding Black Diamond Group or generate 63.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.65%
Values	Daily Returns

Black Diamond Group  vs.  American Video Teleconferencin

Black Diamond Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Black Diamond Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

American Video Telec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Video Teleconferencing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, American Video is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Black Diamond and American Video

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

The idea behind Black Diamond Group and American Video Teleconferencing 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.

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 the Money Managers module to screen money managers from public funds and ETFs managed around the world.