Correlation Between ESCO Technologies and Blacksky Technology
Can any of the company-specific risk be diversified away by investing in both ESCO Technologies 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 ESCO Technologies and Blacksky Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESCO Technologies and Blacksky Technology, you can compare the effects of market volatilities on ESCO Technologies 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 ESCO Technologies with a short position of Blacksky Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESCO Technologies and Blacksky Technology.
Diversification Opportunities for ESCO Technologies and Blacksky Technology
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ESCO and Blacksky is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ESCO Technologies and Blacksky Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blacksky Technology and ESCO 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 ESCO Technologies 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 ESCO Technologies i.e., ESCO Technologies and Blacksky Technology go up and down completely randomly.
Pair Corralation between ESCO Technologies and Blacksky Technology
Considering the 90-day investment horizon ESCO Technologies is expected to generate 0.35 times more return on investment than Blacksky Technology. However, ESCO Technologies is 2.88 times less risky 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 10,705 in ESCO Technologies on August 29, 2024 and sell it today you would earn a total of 4,184 from holding ESCO Technologies or generate 39.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESCO Technologies vs. Blacksky Technology
Performance |
| Timeline |
| ESCO Technologies |
| Blacksky Technology |
ESCO Technologies and Blacksky Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESCO Technologies and Blacksky Technology
The main advantage of trading using opposite ESCO Technologies and Blacksky Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESCO Technologies 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.| ESCO Technologies vs. Cepton Inc | ESCO Technologies vs. SaverOne 2014 Ltd | ESCO Technologies vs. Kraken Robotics | ESCO Technologies vs. Focus Universal |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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