Correlation Between Blacksky Technology and AIA Group
Can any of the company-specific risk be diversified away by investing in both Blacksky Technology and AIA Group 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 Blacksky Technology and AIA Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blacksky Technology and AIA Group, you can compare the effects of market volatilities on Blacksky Technology and AIA Group 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 Blacksky Technology with a short position of AIA Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blacksky Technology and AIA Group.
Diversification Opportunities for Blacksky Technology and AIA Group
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Blacksky and AIA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Blacksky Technology and AIA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIA Group and Blacksky Technology 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 Blacksky Technology are associated (or correlated) with AIA Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIA Group has no effect on the direction of Blacksky Technology i.e., Blacksky Technology and AIA Group go up and down completely randomly.
Pair Corralation between Blacksky Technology and AIA Group
Given the investment horizon of 90 days Blacksky Technology is expected to generate 1.81 times more return on investment than AIA Group. However, Blacksky Technology is 1.81 times more volatile than AIA Group. It trades about 0.01 of its potential returns per unit of risk. AIA Group is currently generating about -0.01 per unit of risk. If you would invest 1,560 in Blacksky Technology on August 28, 2024 and sell it today you would lose (423.00) from holding Blacksky Technology or give up 27.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blacksky Technology vs. AIA Group
Performance |
| Timeline |
| Blacksky Technology |
| AIA Group |
Blacksky Technology and AIA Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blacksky Technology and AIA Group
The main advantage of trading using opposite Blacksky Technology and AIA Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blacksky Technology position performs unexpectedly, AIA Group 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 AIA Group will offset losses from the drop in AIA Group's long position.| Blacksky Technology vs. Focus Universal | Blacksky Technology vs. ESCO Technologies | Blacksky Technology vs. Genasys | Blacksky Technology vs. Cepton Inc |
| AIA Group vs. CNO Financial Group | AIA Group vs. Genworth Financial | AIA Group vs. MetLife Preferred Stock | AIA Group vs. Prudential Public Limited |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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