Correlation Between Compass Diversified and Blade Air
Can any of the company-specific risk be diversified away by investing in both Compass Diversified 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 Compass Diversified and Blade Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Diversified and Blade Air Mobility, you can compare the effects of market volatilities on Compass Diversified 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 Compass Diversified with a short position of Blade Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Diversified and Blade Air.
Diversification Opportunities for Compass Diversified and Blade Air
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compass and Blade is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Compass Diversified 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 Compass Diversified 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 Compass Diversified 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 Compass Diversified i.e., Compass Diversified and Blade Air go up and down completely randomly.
Pair Corralation between Compass Diversified and Blade Air
Assuming the 90 days trading horizon Compass Diversified is expected to under-perform the Blade Air. But the preferred stock apears to be less risky and, when comparing its historical volatility, Compass Diversified is 14.69 times less risky than Blade Air. The preferred stock trades about -0.05 of its potential returns per unit of risk. The Blade Air Mobility is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Blade Air Mobility on November 1, 2024 and sell it today you would lose (3.50) from holding Blade Air Mobility or give up 8.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Diversified vs. Blade Air Mobility
Performance |
| Timeline |
| Compass Diversified |
| Blade Air Mobility |
Compass Diversified and Blade Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Diversified and Blade Air
The main advantage of trading using opposite Compass Diversified and Blade Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Diversified 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.| Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Compass Diversified | Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Tejon Ranch Co |
| Blade Air vs. Joby Aviation | Blade Air vs. Archer Aviation WT | Blade Air vs. Innoviz Technologies | Blade Air vs. Origin Materials Warrant |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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