Correlation Between Blacksky Technology and 030288AC8

Can any of the company-specific risk be diversified away by investing in both Blacksky Technology and 030288AC8 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 030288AC8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blacksky Technology and FE 265 15 JAN 32, you can compare the effects of market volatilities on Blacksky Technology and 030288AC8 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 030288AC8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blacksky Technology and 030288AC8.

Diversification Opportunities for Blacksky Technology and 030288AC8

0.22

Correlation Coefficient

Blacksky Technology  030288AC8

Modest diversification

The 3 months correlation between Blacksky and 030288AC8 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Blacksky Technology and FE 265 15 JAN 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FE 265 15 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 030288AC8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FE 265 15 has no effect on the direction of Blacksky Technology i.e., Blacksky Technology and 030288AC8 go up and down completely randomly.

Pair Corralation between Blacksky Technology and 030288AC8

Given the investment horizon of 90 days Blacksky Technology is expected to generate 6.71 times more return on investment than 030288AC8. However, Blacksky Technology is 6.71 times more volatile than FE 265 15 JAN 32. It trades about 0.11 of its potential returns per unit of risk. FE 265 15 JAN 32 is currently generating about 0.0 per unit of risk. If you would invest  1,098  in Blacksky Technology on October 25, 2024 and sell it today you would earn a total of  96.00  from holding Blacksky Technology or generate 8.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	89.47%
Values	Daily Returns

Blacksky Technology  vs.  FE 265 15 JAN 32

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 unsteady basic indicators, Blacksky Technology showed solid returns over the last few months and may actually be approaching a breakup point.

FE 265 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FE 265 15 JAN 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 030288AC8 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blacksky Technology and 030288AC8

The main advantage of trading using opposite Blacksky Technology and 030288AC8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blacksky Technology position performs unexpectedly, 030288AC8 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 030288AC8 will offset losses from the drop in 030288AC8's long position.

The idea behind Blacksky Technology and FE 265 15 JAN 32 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.