Correlation Between Blacksky Technology and Sky Harbour

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

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

Diversification Opportunities for Blacksky Technology and Sky Harbour

0.2

Correlation Coefficient

Blacksky Technology  Sky Harbour

Modest diversification

The 3 months correlation between Blacksky and Sky is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Blacksky Technology and Sky Harbour Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sky Harbour Group and Blacksky Technology 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 Blacksky Technology are associated (or correlated) with Sky Harbour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sky Harbour Group has no effect on the direction of Blacksky Technology i.e., Blacksky Technology and Sky Harbour go up and down completely randomly.

Pair Corralation between Blacksky Technology and Sky Harbour

Given the investment horizon of 90 days Blacksky Technology is expected to generate 1.89 times more return on investment than Sky Harbour. However, Blacksky Technology is 1.89 times more volatile than Sky Harbour Group. It trades about 0.18 of its potential returns per unit of risk. Sky Harbour Group is currently generating about 0.03 per unit of risk. 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Blacksky Technology  vs.  Sky Harbour Group

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.

Sky Harbour Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sky Harbour Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Sky Harbour may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Blacksky Technology and Sky Harbour

The main advantage of trading using opposite Blacksky Technology and Sky Harbour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blacksky Technology position performs unexpectedly, Sky Harbour 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 Sky Harbour will offset losses from the drop in Sky Harbour's long position.

The idea behind Blacksky Technology and Sky Harbour Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.