Correlation Between Joby Aviation and Blacksky Technology

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

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

Diversification Opportunities for Joby Aviation and Blacksky Technology

0.89

Correlation Coefficient

Joby Aviation  Blacksky Technology

Very poor diversification

The 3 months correlation between Joby and Blacksky is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Joby Aviation and Blacksky Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blacksky Technology 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 Blacksky Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blacksky Technology has no effect on the direction of Joby Aviation i.e., Joby Aviation and Blacksky Technology go up and down completely randomly.

Pair Corralation between Joby Aviation and Blacksky Technology

Assuming the 90 days trading horizon Joby Aviation is expected to generate 1.86 times more return on investment than Blacksky Technology. However, Joby Aviation is 1.86 times more volatile than Blacksky Technology. It trades about 0.16 of its potential returns per unit of risk. Blacksky Technology is currently generating about 0.09 per unit of risk. If you would invest  191.00  in Joby Aviation on October 25, 2024 and sell it today you would earn a total of  43.00  from holding Joby Aviation or generate 22.51% return on investment over 90 days.

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

Joby Aviation  vs.  Blacksky Technology

Joby Aviation

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Joby Aviation are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Joby Aviation unveiled solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Joby Aviation and Blacksky Technology

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

The idea behind Joby Aviation and Blacksky Technology 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.