Correlation Between Cepton and Blacksky Technology
Can any of the company-specific risk be diversified away by investing in both Cepton and Blacksky Technology 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 Cepton and Blacksky Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cepton Inc and Blacksky Technology, you can compare the effects of market volatilities on Cepton and Blacksky Technology 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 Cepton with a short position of Blacksky Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cepton and Blacksky Technology.
Diversification Opportunities for Cepton and Blacksky Technology
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cepton and Blacksky is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc and Blacksky Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blacksky Technology and Cepton 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 Cepton Inc are associated (or correlated) with Blacksky Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blacksky Technology has no effect on the direction of Cepton i.e., Cepton and Blacksky Technology go up and down completely randomly.
Pair Corralation between Cepton and Blacksky Technology
Assuming the 90 days horizon Cepton Inc is expected to generate 3.21 times more return on investment than Blacksky Technology. However, Cepton is 3.21 times more volatile than Blacksky Technology. It trades about 0.08 of its potential returns per unit of risk. Blacksky Technology is currently generating about 0.03 per unit of risk. If you would invest 0.80 in Cepton Inc on August 29, 2024 and sell it today you would lose (0.06) from holding Cepton Inc or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.87% |
| Values | Daily Returns |
Cepton Inc vs. Blacksky Technology
Performance |
| Timeline |
| Cepton Inc |
| Blacksky Technology |
Cepton and Blacksky Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cepton and Blacksky Technology
The main advantage of trading using opposite Cepton and Blacksky Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cepton position performs unexpectedly, Blacksky Technology 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 Blacksky Technology will offset losses from the drop in Blacksky Technology's long position.| Cepton vs. Cepton Inc | Cepton vs. Thayer Ventures Acquisition | Cepton vs. Anghami Warrants | Cepton vs. Inspirato |
| Blacksky Technology vs. Focus Universal | Blacksky Technology vs. ESCO Technologies | Blacksky Technology vs. Genasys | Blacksky Technology vs. Cepton 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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