Correlation Between Blacksky Technology and MICS Old

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

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

Diversification Opportunities for Blacksky Technology and MICS Old

-0.08

Correlation Coefficient

Blacksky Technology  MICS Old

Good diversification

The 3 months correlation between Blacksky and MICS is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Blacksky Technology and MICS Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICS Old 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 MICS Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICS Old has no effect on the direction of Blacksky Technology i.e., Blacksky Technology and MICS Old go up and down completely randomly.

Pair Corralation between Blacksky Technology and MICS Old

Given the investment horizon of 90 days Blacksky Technology is expected to generate 0.61 times more return on investment than MICS Old. However, Blacksky Technology is 1.63 times less risky than MICS Old. It trades about 0.03 of its potential returns per unit of risk. MICS Old is currently generating about -0.02 per unit of risk. If you would invest  1,080  in Blacksky Technology on October 25, 2024 and sell it today you would earn a total of  89.00  from holding Blacksky Technology or generate 8.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.96%
Values	Daily Returns

Blacksky Technology  vs.  MICS Old

Blacksky Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blacksky Technology are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Blacksky Technology showed solid returns over the last few months and may actually be approaching a breakup point.

MICS Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MICS Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Blacksky Technology and MICS Old

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

The idea behind Blacksky Technology and MICS Old 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.