Correlation Between BK Technologies and Telesat Corp
Can any of the company-specific risk be diversified away by investing in both BK Technologies and Telesat Corp 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 BK Technologies and Telesat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BK Technologies and Telesat Corp, you can compare the effects of market volatilities on BK Technologies and Telesat Corp 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 BK Technologies with a short position of Telesat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BK Technologies and Telesat Corp.
Diversification Opportunities for BK Technologies and Telesat Corp
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BKTI and Telesat is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BK Technologies and Telesat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telesat Corp and BK Technologies 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 BK Technologies are associated (or correlated) with Telesat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telesat Corp has no effect on the direction of BK Technologies i.e., BK Technologies and Telesat Corp go up and down completely randomly.
Pair Corralation between BK Technologies and Telesat Corp
Given the investment horizon of 90 days BK Technologies is expected to generate 0.96 times more return on investment than Telesat Corp. However, BK Technologies is 1.04 times less risky than Telesat Corp. It trades about 0.12 of its potential returns per unit of risk. Telesat Corp is currently generating about 0.05 per unit of risk. If you would invest 1,294 in BK Technologies on September 3, 2024 and sell it today you would earn a total of 2,163 from holding BK Technologies or generate 167.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BK Technologies vs. Telesat Corp
Performance |
| Timeline |
| BK Technologies |
| Telesat Corp |
BK Technologies and Telesat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BK Technologies and Telesat Corp
The main advantage of trading using opposite BK Technologies and Telesat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BK Technologies position performs unexpectedly, Telesat Corp 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 Telesat Corp will offset losses from the drop in Telesat Corp's long position.| BK Technologies vs. Hewlett Packard Enterprise | BK Technologies vs. Juniper Networks | BK Technologies vs. Motorola Solutions | BK Technologies vs. Cisco Systems |
| Telesat Corp vs. KVH Industries | Telesat Corp vs. Comtech Telecommunications Corp | Telesat Corp vs. Knowles Cor | Telesat Corp vs. Ituran Location and |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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