Correlation Between Bioceres Crop and Blacksky Technology

Can any of the company-specific risk be diversified away by investing in both Bioceres Crop 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 Bioceres Crop and Blacksky Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bioceres Crop Solutions and Blacksky Technology, you can compare the effects of market volatilities on Bioceres Crop 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 Bioceres Crop with a short position of Blacksky Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bioceres Crop and Blacksky Technology.

Diversification Opportunities for Bioceres Crop and Blacksky Technology

-0.7

Correlation Coefficient

Bioceres Crop  Blacksky Technology

Excellent diversification

The 3 months correlation between Bioceres and Blacksky is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bioceres Crop Solutions and Blacksky Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blacksky Technology and Bioceres Crop 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 Bioceres Crop Solutions 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 Bioceres Crop i.e., Bioceres Crop and Blacksky Technology go up and down completely randomly.

Pair Corralation between Bioceres Crop and Blacksky Technology

Given the investment horizon of 90 days Bioceres Crop Solutions is expected to under-perform the Blacksky Technology. But the stock apears to be less risky and, when comparing its historical volatility, Bioceres Crop Solutions is 2.39 times less risky than Blacksky Technology. The stock trades about -0.15 of its potential returns per unit of risk. The Blacksky Technology is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  576.00  in Blacksky Technology on September 15, 2024 and sell it today you would earn a total of  475.00  from holding Blacksky Technology or generate 82.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bioceres Crop Solutions  vs.  Blacksky Technology

Bioceres Crop Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bioceres Crop Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Blacksky Technology

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blacksky Technology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Blacksky Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bioceres Crop and Blacksky Technology

The main advantage of trading using opposite Bioceres Crop and Blacksky Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bioceres Crop 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.

The idea behind Bioceres Crop Solutions and Blacksky Technology 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.