Correlation Between Blade Air and Joby Aviation

Can any of the company-specific risk be diversified away by investing in both Blade Air and Joby Aviation 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 Joby Aviation 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 Joby Aviation, you can compare the effects of market volatilities on Blade Air and Joby Aviation 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 Joby Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blade Air and Joby Aviation.

Diversification Opportunities for Blade Air and Joby Aviation

0.85

Correlation Coefficient

Blade Air  Joby Aviation

Very poor diversification

The 3 months correlation between Blade and Joby is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Blade Air Mobility and Joby Aviation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joby Aviation 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 Joby Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joby Aviation has no effect on the direction of Blade Air i.e., Blade Air and Joby Aviation go up and down completely randomly.

Pair Corralation between Blade Air and Joby Aviation

Assuming the 90 days horizon Blade Air Mobility is expected to under-perform the Joby Aviation. In addition to that, Blade Air is 1.69 times more volatile than Joby Aviation. It trades about -0.09 of its total potential returns per unit of risk. Joby Aviation is currently generating about -0.06 per unit of volatility. If you would invest  839.00  in Joby Aviation on December 28, 2024 and sell it today you would lose (182.00) from holding Joby Aviation or give up 21.69% of portfolio value over 90 days.

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

Blade Air Mobility  vs.  Joby Aviation

Blade Air Mobility

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blade Air Mobility 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 technical and fundamental indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Joby Aviation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Joby Aviation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Blade Air and Joby Aviation

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

The idea behind Blade Air Mobility and Joby Aviation 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.