Correlation Between Blacksky Technology and El Al

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

By analyzing existing cross correlation between Blacksky Technology and El Al Israel, you can compare the effects of market volatilities on Blacksky Technology and El Al 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 El Al. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blacksky Technology and El Al.

Diversification Opportunities for Blacksky Technology and El Al

0.26

Correlation Coefficient

Blacksky Technology  El Al

Modest diversification

The 3 months correlation between Blacksky and ELALF is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Blacksky Technology and El Al Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Al Israel 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 El Al. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Al Israel has no effect on the direction of Blacksky Technology i.e., Blacksky Technology and El Al go up and down completely randomly.

Pair Corralation between Blacksky Technology and El Al

Given the investment horizon of 90 days Blacksky Technology is expected to under-perform the El Al. In addition to that, Blacksky Technology is 2.84 times more volatile than El Al Israel. It trades about 0.0 of its total potential returns per unit of risk. El Al Israel is currently generating about 0.18 per unit of volatility. If you would invest  225.00  in El Al Israel on December 21, 2024 and sell it today you would earn a total of  75.00  from holding El Al Israel or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

Blacksky Technology  vs.  El Al Israel

Blacksky Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blacksky Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Blacksky Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

El Al Israel

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in El Al Israel are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting essential indicators, El Al reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blacksky Technology and El Al

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

The idea behind Blacksky Technology and El Al Israel 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.