Correlation Between Blacksky Technology and Ameriguard Security

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

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

Diversification Opportunities for Blacksky Technology and Ameriguard Security

-0.42

Correlation Coefficient

Blacksky Technology  Ameriguard Security

Very good diversification

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

Pair Corralation between Blacksky Technology and Ameriguard Security

Given the investment horizon of 90 days Blacksky Technology is expected to generate 1.13 times less return on investment than Ameriguard Security. But when comparing it to its historical volatility, Blacksky Technology is 3.94 times less risky than Ameriguard Security. It trades about 0.18 of its potential returns per unit of risk. Ameriguard Security Services is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Ameriguard Security Services on October 26, 2024 and sell it today you would lose (4.92) from holding Ameriguard Security Services or give up 35.14% of portfolio value over 90 days.

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

Blacksky Technology  vs.  Ameriguard Security Services

Blacksky Technology

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blacksky Technology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Blacksky Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Ameriguard Security

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriguard Security Services are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Ameriguard Security unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blacksky Technology and Ameriguard Security

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

The idea behind Blacksky Technology and Ameriguard Security Services 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.