Correlation Between Bolt Projects and Air Transport

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

By analyzing existing cross correlation between Bolt Projects Holdings, and Air Transport Services, you can compare the effects of market volatilities on Bolt Projects and Air Transport 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 Bolt Projects with a short position of Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bolt Projects and Air Transport.

Diversification Opportunities for Bolt Projects and Air Transport

-0.49

Correlation Coefficient

Bolt Projects  Air Transport

Very good diversification

The 3 months correlation between Bolt and Air is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bolt Projects Holdings, and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services and Bolt Projects 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 Bolt Projects Holdings, are associated (or correlated) with Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of Bolt Projects i.e., Bolt Projects and Air Transport go up and down completely randomly.

Pair Corralation between Bolt Projects and Air Transport

Assuming the 90 days horizon Bolt Projects Holdings, is expected to generate 165.52 times more return on investment than Air Transport. However, Bolt Projects is 165.52 times more volatile than Air Transport Services. It trades about 0.18 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.55 per unit of risk. If you would invest  4.00  in Bolt Projects Holdings, on October 23, 2024 and sell it today you would earn a total of  0.94  from holding Bolt Projects Holdings, or generate 23.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	66.67%
Values	Daily Returns

Bolt Projects Holdings,  vs.  Air Transport Services

Bolt Projects Holdings,

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Bolt Projects Holdings, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly inconsistent forward-looking signals, Bolt Projects showed solid returns over the last few months and may actually be approaching a breakup point.

Air Transport Services

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Air Transport Services are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Air Transport reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bolt Projects and Air Transport

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

The idea behind Bolt Projects Holdings, and Air Transport Services 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.