Correlation Between BLZ and XT Token

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

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

Diversification Opportunities for BLZ and XT Token

0.42

Correlation Coefficient

BLZ  XT Token

Very weak diversification

The 3 months correlation between BLZ and XT Token is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BLZ and XT Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XT Token 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 XT Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XT Token has no effect on the direction of BLZ i.e., BLZ and XT Token go up and down completely randomly.

Pair Corralation between BLZ and XT Token

Assuming the 90 days trading horizon BLZ is expected to generate 1.27 times less return on investment than XT Token. In addition to that, BLZ is 2.21 times more volatile than XT Token. It trades about 0.05 of its total potential returns per unit of risk. XT Token is currently generating about 0.14 per unit of volatility. If you would invest  467.00  in XT Token on April 20, 2025 and sell it today you would earn a total of  82.00  from holding XT Token or generate 17.56% return on investment over 90 days.

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

BLZ  vs.  XT Token

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 exhibited solid returns over the last few months and may actually be approaching a breakup point.

XT Token

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in XT Token are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, XT Token exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BLZ and XT Token

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

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