Correlation Between BLZ and Coinbase Wrapped

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

By analyzing existing cross correlation between BLZ and Coinbase Wrapped Staked, you can compare the effects of market volatilities on BLZ and Coinbase Wrapped 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 Coinbase Wrapped. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLZ and Coinbase Wrapped.

Diversification Opportunities for BLZ and Coinbase Wrapped

0.12

Correlation Coefficient

BLZ  Coinbase Wrapped

Average diversification

The 3 months correlation between BLZ and Coinbase is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding BLZ and Coinbase Wrapped Staked in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coinbase Wrapped Staked 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 Coinbase Wrapped. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coinbase Wrapped Staked has no effect on the direction of BLZ i.e., BLZ and Coinbase Wrapped go up and down completely randomly.

Pair Corralation between BLZ and Coinbase Wrapped

Assuming the 90 days trading horizon BLZ is expected to generate 7.28 times less return on investment than Coinbase Wrapped. But when comparing it to its historical volatility, BLZ is 1.06 times less risky than Coinbase Wrapped. It trades about 0.04 of its potential returns per unit of risk. Coinbase Wrapped Staked is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  193,752  in Coinbase Wrapped Staked on April 23, 2025 and sell it today you would earn a total of  202,893  from holding Coinbase Wrapped Staked or generate 104.72% return on investment over 90 days.

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

BLZ  vs.  Coinbase Wrapped Staked

BLZ

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BLZ are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, BLZ may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Coinbase Wrapped Staked

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coinbase Wrapped Staked are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Coinbase Wrapped exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BLZ and Coinbase Wrapped

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

The idea behind BLZ and Coinbase Wrapped Staked 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.