Correlation Between Blacksky Technology and Erste Group
Can any of the company-specific risk be diversified away by investing in both Blacksky Technology and Erste 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 Erste 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 Erste Group Bank, you can compare the effects of market volatilities on Blacksky Technology and Erste 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 Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blacksky Technology and Erste Group.
Diversification Opportunities for Blacksky Technology and Erste Group
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blacksky and Erste is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Blacksky Technology and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank 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 Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Blacksky Technology i.e., Blacksky Technology and Erste Group go up and down completely randomly.
Pair Corralation between Blacksky Technology and Erste Group
Given the investment horizon of 90 days Blacksky Technology is expected to generate 3.84 times more return on investment than Erste Group. However, Blacksky Technology is 3.84 times more volatile than Erste Group Bank. It trades about 0.18 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.19 per unit of risk. If you would invest 1,037 in Blacksky Technology on October 24, 2024 and sell it today you would earn a total of 172.00 from holding Blacksky Technology or generate 16.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blacksky Technology vs. Erste Group Bank
Performance |
| Timeline |
| Blacksky Technology |
| Erste Group Bank |
Blacksky Technology and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blacksky Technology and Erste Group
The main advantage of trading using opposite Blacksky Technology and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blacksky Technology position performs unexpectedly, Erste 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 Erste Group will offset losses from the drop in Erste Group's long position.| Blacksky Technology vs. Focus Universal | Blacksky Technology vs. ESCO Technologies | Blacksky Technology vs. Genasys | Blacksky Technology vs. Darkpulse |
| Erste Group vs. DBS Group Holdings | Erste Group vs. Swedbank AB | Erste Group vs. United Overseas Bank | Erste Group vs. Bank Mandiri Persero |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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