Correlation Between Joby Aviation and Blade Air

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

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

Diversification Opportunities for Joby Aviation and Blade Air

0.75

Correlation Coefficient

Joby Aviation  Blade Air

Poor diversification

The 3 months correlation between Joby and Blade is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Joby Aviation and Blade Air Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blade Air Mobility 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 Blade Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blade Air Mobility has no effect on the direction of Joby Aviation i.e., Joby Aviation and Blade Air go up and down completely randomly.

Pair Corralation between Joby Aviation and Blade Air

Assuming the 90 days trading horizon Joby Aviation is expected to generate 0.91 times more return on investment than Blade Air. However, Joby Aviation is 1.1 times less risky than Blade Air. It trades about -0.09 of its potential returns per unit of risk. Blade Air Mobility is currently generating about -0.09 per unit of risk. If you would invest  205.00  in Joby Aviation on December 28, 2024 and sell it today you would lose (87.00) from holding Joby Aviation or give up 42.44% of portfolio value over 90 days.

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

Joby Aviation  vs.  Blade Air Mobility

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 conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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.

Pair Trading with Joby Aviation and Blade Air

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

The idea behind Joby Aviation and Blade Air Mobility 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.