Correlation Between Paysafe and Blade Air
Can any of the company-specific risk be diversified away by investing in both Paysafe 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 Paysafe and Blade Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paysafe Ltd Wt and Blade Air Mobility, you can compare the effects of market volatilities on Paysafe 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 Paysafe with a short position of Blade Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paysafe and Blade Air.
Diversification Opportunities for Paysafe and Blade Air
Weak diversification
The 3 months correlation between Paysafe and Blade is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe Ltd Wt 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 Paysafe 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 Paysafe Ltd Wt 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 Paysafe i.e., Paysafe and Blade Air go up and down completely randomly.
Pair Corralation between Paysafe and Blade Air
Assuming the 90 days trading horizon Paysafe is expected to generate 2.29 times less return on investment than Blade Air. But when comparing it to its historical volatility, Paysafe Ltd Wt is 1.19 times less risky than Blade Air. It trades about 0.03 of its potential returns per unit of risk. Blade Air Mobility is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 57.00 in Blade Air Mobility on August 31, 2024 and sell it today you would lose (8.00) from holding Blade Air Mobility or give up 14.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.84% |
| Values | Daily Returns |
Paysafe Ltd Wt vs. Blade Air Mobility
Performance |
| Timeline |
| Paysafe Ltd Wt |
| Blade Air Mobility |
Paysafe and Blade Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paysafe and Blade Air
The main advantage of trading using opposite Paysafe and Blade Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paysafe 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.The idea behind Paysafe Ltd Wt and Blade Air Mobility pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Blade Air vs. Joby Aviation | Blade Air vs. Innoviz Technologies | Blade Air vs. Origin Materials Warrant | Blade Air vs. HUMANA 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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