Correlation Between Astar and Satellogic Warrant
Can any of the company-specific risk be diversified away by investing in both Astar and Satellogic Warrant 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 Astar and Satellogic Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Satellogic Warrant, you can compare the effects of market volatilities on Astar and Satellogic Warrant 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 Astar with a short position of Satellogic Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Satellogic Warrant.
Diversification Opportunities for Astar and Satellogic Warrant
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Astar and Satellogic is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Satellogic Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satellogic Warrant and Astar 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 Astar are associated (or correlated) with Satellogic Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satellogic Warrant has no effect on the direction of Astar i.e., Astar and Satellogic Warrant go up and down completely randomly.
Pair Corralation between Astar and Satellogic Warrant
Assuming the 90 days trading horizon Astar is expected to generate 63.82 times less return on investment than Satellogic Warrant. But when comparing it to its historical volatility, Astar is 16.21 times less risky than Satellogic Warrant. It trades about 0.03 of its potential returns per unit of risk. Satellogic Warrant is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 29.00 in Satellogic Warrant on October 20, 2024 and sell it today you would earn a total of 11.00 from holding Satellogic Warrant or generate 37.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.3% |
| Values | Daily Returns |
Astar vs. Satellogic Warrant
Performance |
| Timeline |
| Astar |
| Satellogic Warrant |
Astar and Satellogic Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Satellogic Warrant
The main advantage of trading using opposite Astar and Satellogic Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Satellogic Warrant 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 Satellogic Warrant will offset losses from the drop in Satellogic Warrant's long position.The idea behind Astar and Satellogic Warrant 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.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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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