Correlation Between Blade Air and Wheels Up

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

By analyzing existing cross correlation between Blade Air Mobility and Wheels Up Experience, you can compare the effects of market volatilities on Blade Air and Wheels Up 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 Blade Air with a short position of Wheels Up. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blade Air and Wheels Up.

Diversification Opportunities for Blade Air and Wheels Up

-0.26

Correlation Coefficient

Blade Air  Wheels Up

Very good diversification

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

Pair Corralation between Blade Air and Wheels Up

Given the investment horizon of 90 days Blade Air Mobility is expected to generate 0.5 times more return on investment than Wheels Up. However, Blade Air Mobility is 1.99 times less risky than Wheels Up. It trades about 0.03 of its potential returns per unit of risk. Wheels Up Experience is currently generating about 0.0 per unit of risk. If you would invest  439.00  in Blade Air Mobility on October 10, 2024 and sell it today you would earn a total of  31.00  from holding Blade Air Mobility or generate 7.06% return on investment over 90 days.

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

Blade Air Mobility  vs.  Wheels Up Experience

Blade Air Mobility

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blade Air Mobility are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Blade Air exhibited solid returns over the last few months and may actually be approaching a breakup point.

Wheels Up Experience

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wheels Up Experience has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Blade Air and Wheels Up

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

The idea behind Blade Air Mobility and Wheels Up Experience 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.