Correlation Between BLZ and ARPA

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

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

Diversification Opportunities for BLZ and ARPA

0.69

Correlation Coefficient

BLZ  ARPA

Poor diversification

The 3 months correlation between BLZ and ARPA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding BLZ and ARPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARPA and BLZ 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 BLZ are associated (or correlated) with ARPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARPA has no effect on the direction of BLZ i.e., BLZ and ARPA go up and down completely randomly.

Pair Corralation between BLZ and ARPA

Assuming the 90 days trading horizon BLZ is expected to under-perform the ARPA. But the crypto coin apears to be less risky and, when comparing its historical volatility, BLZ is 2.47 times less risky than ARPA. The crypto coin trades about -0.21 of its potential returns per unit of risk. The ARPA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2.14  in ARPA on July 30, 2025 and sell it today you would lose (0.15) from holding ARPA or give up 7.01% of portfolio value over 90 days.

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

BLZ  vs.  ARPA

BLZ

Risk-Adjusted Performance

Weakest

Over the last 90 days BLZ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in November 2025. The latest tumult may also be a sign of longer-term up-swing for BLZ shareholders.

ARPA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ARPA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, ARPA may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with BLZ and ARPA

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

The idea behind BLZ and ARPA 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.