Correlation Between Joby Aviation and BKSY WT

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

By analyzing existing cross correlation between Joby Aviation and BKSY WT, you can compare the effects of market volatilities on Joby Aviation and BKSY WT 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 Joby Aviation with a short position of BKSY WT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joby Aviation and BKSY WT.

Diversification Opportunities for Joby Aviation and BKSY WT

-0.05

Correlation Coefficient

Joby Aviation  BKSY WT

Good diversification

The 3 months correlation between Joby and BKSY is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Joby Aviation and BKSY WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKSY WT and Joby Aviation 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 Joby Aviation are associated (or correlated) with BKSY WT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKSY WT has no effect on the direction of Joby Aviation i.e., Joby Aviation and BKSY WT go up and down completely randomly.

Pair Corralation between Joby Aviation and BKSY WT

Assuming the 90 days trading horizon Joby Aviation is expected to under-perform the BKSY WT. But the stock apears to be less risky and, when comparing its historical volatility, Joby Aviation is 2.21 times less risky than BKSY WT. The stock trades about -0.02 of its potential returns per unit of risk. The BKSY WT is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  12.00  in BKSY WT on December 21, 2024 and sell it today you would earn a total of  3.00  from holding BKSY WT or generate 25.0% return on investment over 90 days.

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

Joby Aviation  vs.  BKSY WT

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

BKSY WT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BKSY WT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BKSY WT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Joby Aviation and BKSY WT

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

The idea behind Joby Aviation and BKSY WT 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.