Correlation Between BKSY WT and Blade Air
Can any of the company-specific risk be diversified away by investing in both BKSY WT 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 BKSY WT and Blade Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKSY WT and Blade Air Mobility, you can compare the effects of market volatilities on BKSY WT 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 BKSY WT with a short position of Blade Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKSY WT and Blade Air.
Diversification Opportunities for BKSY WT and Blade Air
Very weak diversification
The 3 months correlation between BKSY and Blade is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding BKSY WT 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 BKSY WT 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 BKSY WT 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 BKSY WT i.e., BKSY WT and Blade Air go up and down completely randomly.
Pair Corralation between BKSY WT and Blade Air
Assuming the 90 days trading horizon BKSY WT is expected to generate 1.26 times more return on investment than Blade Air. However, BKSY WT is 1.26 times more volatile than Blade Air Mobility. It trades about 0.12 of its potential returns per unit of risk. Blade Air Mobility is currently generating about 0.05 per unit of risk. If you would invest 3.45 in BKSY WT on August 31, 2024 and sell it today you would earn a total of 3.96 from holding BKSY WT or generate 114.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 23.04% |
| Values | Daily Returns |
BKSY WT vs. Blade Air Mobility
Performance |
| Timeline |
| BKSY WT |
| Blade Air Mobility |
BKSY WT and Blade Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKSY WT and Blade Air
The main advantage of trading using opposite BKSY WT and Blade Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKSY WT 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 BKSY WT 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.| Blade Air vs. Joby Aviation | Blade Air vs. Innoviz Technologies | Blade Air vs. Origin Materials Warrant | Blade Air vs. HUMANA INC |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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