Correlation Between Bridger Aerospace and Knightscope
Can any of the company-specific risk be diversified away by investing in both Bridger Aerospace and Knightscope 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 Bridger Aerospace and Knightscope into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridger Aerospace Group and Knightscope, you can compare the effects of market volatilities on Bridger Aerospace and Knightscope 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 Bridger Aerospace with a short position of Knightscope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridger Aerospace and Knightscope.
Diversification Opportunities for Bridger Aerospace and Knightscope
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bridger and Knightscope is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bridger Aerospace Group and Knightscope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knightscope and Bridger Aerospace 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 Bridger Aerospace Group are associated (or correlated) with Knightscope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knightscope has no effect on the direction of Bridger Aerospace i.e., Bridger Aerospace and Knightscope go up and down completely randomly.
Pair Corralation between Bridger Aerospace and Knightscope
Given the investment horizon of 90 days Bridger Aerospace Group is expected to under-perform the Knightscope. But the stock apears to be less risky and, when comparing its historical volatility, Bridger Aerospace Group is 2.95 times less risky than Knightscope. The stock trades about -0.19 of its potential returns per unit of risk. The Knightscope is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,586 in Knightscope on August 27, 2024 and sell it today you would lose (23.00) from holding Knightscope or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridger Aerospace Group vs. Knightscope
Performance |
| Timeline |
| Bridger Aerospace |
| Knightscope |
Bridger Aerospace and Knightscope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridger Aerospace and Knightscope
The main advantage of trading using opposite Bridger Aerospace and Knightscope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridger Aerospace position performs unexpectedly, Knightscope 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 Knightscope will offset losses from the drop in Knightscope's long position.| Bridger Aerospace vs. Allegion PLC | Bridger Aerospace vs. MSA Safety | Bridger Aerospace vs. Resideo Technologies | Bridger Aerospace vs. NL Industries |
| Knightscope vs. Plexus Corp | Knightscope vs. Jabil Circuit | Knightscope vs. Sanmina | Knightscope vs. Methode Electronics |
Check out your portfolio center.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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