Correlation Between Astra Space and Vertical Aerospace
Can any of the company-specific risk be diversified away by investing in both Astra Space and Vertical Aerospace 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 Astra Space and Vertical Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra Space and Vertical Aerospace, you can compare the effects of market volatilities on Astra Space and Vertical Aerospace 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 Astra Space with a short position of Vertical Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Space and Vertical Aerospace.
Diversification Opportunities for Astra Space and Vertical Aerospace
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astra and Vertical is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Astra Space and Vertical Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertical Aerospace and Astra Space 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 Astra Space are associated (or correlated) with Vertical Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertical Aerospace has no effect on the direction of Astra Space i.e., Astra Space and Vertical Aerospace go up and down completely randomly.
Pair Corralation between Astra Space and Vertical Aerospace
Given the investment horizon of 90 days Astra Space is expected to under-perform the Vertical Aerospace. But the stock apears to be less risky and, when comparing its historical volatility, Astra Space is 1.05 times less risky than Vertical Aerospace. The stock trades about -0.13 of its potential returns per unit of risk. The Vertical Aerospace is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 720.00 in Vertical Aerospace on August 28, 2024 and sell it today you would lose (23.00) from holding Vertical Aerospace or give up 3.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 56.94% |
| Values | Daily Returns |
Astra Space vs. Vertical Aerospace
Performance |
| Timeline |
| Astra Space |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Vertical Aerospace |
Astra Space and Vertical Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Space and Vertical Aerospace
The main advantage of trading using opposite Astra Space and Vertical Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Space position performs unexpectedly, Vertical Aerospace 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 Vertical Aerospace will offset losses from the drop in Vertical Aerospace's long position.| Astra Space vs. Virgin Galactic Holdings | Astra Space vs. Planet Labs PBC | Astra Space vs. Eve Holding | Astra Space vs. Redwire Corp |
| Vertical Aerospace vs. Redwire Corp | Vertical Aerospace vs. Sidus Space | Vertical Aerospace vs. Rocket Lab USA | Vertical Aerospace vs. Momentus |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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