Correlation Between Blacksky Technology and Truxton

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

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

Diversification Opportunities for Blacksky Technology and Truxton

0.53

Correlation Coefficient

Blacksky Technology  Truxton

Very weak diversification

The 3 months correlation between Blacksky and Truxton is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Blacksky Technology and Truxton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truxton 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 Truxton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truxton has no effect on the direction of Blacksky Technology i.e., Blacksky Technology and Truxton go up and down completely randomly.

Pair Corralation between Blacksky Technology and Truxton

Given the investment horizon of 90 days Blacksky Technology is expected to under-perform the Truxton. In addition to that, Blacksky Technology is 3.9 times more volatile than Truxton. It trades about -0.36 of its total potential returns per unit of risk. Truxton is currently generating about 0.03 per unit of volatility. If you would invest  7,845  in Truxton on December 10, 2024 and sell it today you would earn a total of  80.00  from holding Truxton or generate 1.02% return on investment over 90 days.

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

Blacksky Technology  vs.  Truxton

Blacksky Technology

Risk-Adjusted Performance

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.

Truxton

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Truxton are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Truxton may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Blacksky Technology and Truxton

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

The idea behind Blacksky Technology and Truxton 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.