Correlation Between BK Technologies and ViaSat

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

By analyzing existing cross correlation between BK Technologies and ViaSat Inc, you can compare the effects of market volatilities on BK Technologies and ViaSat 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 BK Technologies with a short position of ViaSat. Check out your portfolio center. Please also check ongoing floating volatility patterns of BK Technologies and ViaSat.

Diversification Opportunities for BK Technologies and ViaSat

-0.82

Correlation Coefficient

BK Technologies  ViaSat

Pay attention - limited upside

The 3 months correlation between BKTI and ViaSat is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding BK Technologies and ViaSat Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViaSat Inc and BK 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 BK Technologies are associated (or correlated) with ViaSat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViaSat Inc has no effect on the direction of BK Technologies i.e., BK Technologies and ViaSat go up and down completely randomly.

Pair Corralation between BK Technologies and ViaSat

Given the investment horizon of 90 days BK Technologies is expected to generate 0.72 times more return on investment than ViaSat. However, BK Technologies is 1.39 times less risky than ViaSat. It trades about 0.12 of its potential returns per unit of risk. ViaSat Inc is currently generating about -0.04 per unit of risk. If you would invest  1,239  in BK Technologies on September 2, 2024 and sell it today you would earn a total of  2,079  from holding BK Technologies or generate 167.8% return on investment over 90 days.

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

BK Technologies  vs.  ViaSat Inc

BK Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BK Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, BK Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ViaSat Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ViaSat Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BK Technologies and ViaSat

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

The idea behind BK Technologies and ViaSat Inc 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.