Correlation Between Redwire Corp and Blacksky Technology
Can any of the company-specific risk be diversified away by investing in both Redwire Corp 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 Redwire Corp and Blacksky Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redwire Corp and Blacksky Technology, you can compare the effects of market volatilities on Redwire Corp 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 Redwire Corp with a short position of Blacksky Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redwire Corp and Blacksky Technology.
Diversification Opportunities for Redwire Corp and Blacksky Technology
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Redwire and Blacksky is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Redwire Corp and Blacksky Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blacksky Technology and Redwire 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 Redwire Corp 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 Redwire Corp i.e., Redwire Corp and Blacksky Technology go up and down completely randomly.
Pair Corralation between Redwire Corp and Blacksky Technology
Considering the 90-day investment horizon Redwire Corp is expected to generate 0.88 times more return on investment than Blacksky Technology. However, Redwire Corp is 1.14 times less risky than Blacksky Technology. It trades about 0.16 of its potential returns per unit of risk. Blacksky Technology is currently generating about 0.02 per unit of risk. If you would invest 250.00 in Redwire Corp on September 14, 2024 and sell it today you would earn a total of 953.00 from holding Redwire Corp or generate 381.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Redwire Corp vs. Blacksky Technology
Performance |
Timeline |
Redwire Corp |
Blacksky Technology |
Redwire Corp and Blacksky Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Redwire Corp and Blacksky Technology
The main advantage of trading using opposite Redwire Corp and Blacksky Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redwire Corp 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.Redwire Corp vs. Sidus Space | Redwire Corp vs. Planet Labs PBC | Redwire Corp vs. Intuitive Machines | Redwire Corp vs. Rocket Lab USA |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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