Correlation Between Blade Air and Achieve Life

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Can any of the company-specific risk be diversified away by investing in both Blade Air and Achieve Life 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 Blade Air and Achieve Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blade Air Mobility and Achieve Life Sciences, you can compare the effects of market volatilities on Blade Air and Achieve Life 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 Blade Air with a short position of Achieve Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blade Air and Achieve Life.

Diversification Opportunities for Blade Air and Achieve Life

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Blade and Achieve is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Blade Air Mobility and Achieve Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Achieve Life Sciences and Blade Air 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 Blade Air Mobility are associated (or correlated) with Achieve Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Achieve Life Sciences has no effect on the direction of Blade Air i.e., Blade Air and Achieve Life go up and down completely randomly.

Pair Corralation between Blade Air and Achieve Life

Given the investment horizon of 90 days Blade Air Mobility is expected to generate 1.13 times more return on investment than Achieve Life. However, Blade Air is 1.13 times more volatile than Achieve Life Sciences. It trades about -0.02 of its potential returns per unit of risk. Achieve Life Sciences is currently generating about -0.03 per unit of risk. If you would invest  1,015  in Blade Air Mobility on August 31, 2022 and sell it today you would lose (550.00)  from holding Blade Air Mobility or give up 54.19% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Blade Air Mobility  vs.  Achieve Life Sciences

 Performance (%) 
       Timeline  
Blade Air Mobility 
Blade Performance
0 of 100
Over the last 90 days Blade Air Mobility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Blade Price Channel

Achieve Life Sciences 
Achieve Performance
0 of 100
Over the last 90 days Achieve Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical indicators remain fairly stable which may send shares a bit higher in December 2022. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Achieve Price Channel

Blade Air and Achieve Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Blade Air and Achieve Life

The main advantage of trading using opposite Blade Air and Achieve Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blade Air position performs unexpectedly, Achieve Life 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 Achieve Life will offset losses from the drop in Achieve Life's long position.
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The idea behind Blade Air Mobility and Achieve Life Sciences 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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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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