Correlation Between Telesat Corp and BK Technologies
Can any of the company-specific risk be diversified away by investing in both Telesat Corp and BK Technologies 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 Telesat Corp and BK Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telesat Corp and BK Technologies, you can compare the effects of market volatilities on Telesat Corp and BK Technologies 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 Telesat Corp with a short position of BK Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telesat Corp and BK Technologies.
Diversification Opportunities for Telesat Corp and BK Technologies
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Telesat and BKTI is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Telesat Corp and BK Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Technologies and Telesat Corp 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 Telesat Corp are associated (or correlated) with BK Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Technologies has no effect on the direction of Telesat Corp i.e., Telesat Corp and BK Technologies go up and down completely randomly.
Pair Corralation between Telesat Corp and BK Technologies
Given the investment horizon of 90 days Telesat Corp is expected to generate 2.48 times less return on investment than BK Technologies. In addition to that, Telesat Corp is 1.04 times more volatile than BK Technologies. It trades about 0.05 of its total potential returns per unit of risk. BK Technologies is currently generating about 0.12 per unit of volatility. 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 |
Telesat Corp vs. BK Technologies
Performance |
| Timeline |
| Telesat Corp |
| BK Technologies |
Telesat Corp and BK Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telesat Corp and BK Technologies
The main advantage of trading using opposite Telesat Corp and BK Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telesat Corp position performs unexpectedly, BK Technologies 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 BK Technologies will offset losses from the drop in BK Technologies' long position.| Telesat Corp vs. KVH Industries | Telesat Corp vs. Comtech Telecommunications Corp | Telesat Corp vs. Knowles Cor | Telesat Corp vs. Ituran Location and |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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