Correlation Between Astra Space and Planet Labs
Can any of the company-specific risk be diversified away by investing in both Astra Space and Planet Labs 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 Planet Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra Space and Planet Labs PBC, you can compare the effects of market volatilities on Astra Space and Planet Labs 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 Planet Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Space and Planet Labs.
Diversification Opportunities for Astra Space and Planet Labs
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astra and Planet is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Astra Space and Planet Labs PBC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Labs PBC 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 Planet Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Labs PBC has no effect on the direction of Astra Space i.e., Astra Space and Planet Labs go up and down completely randomly.
Pair Corralation between Astra Space and Planet Labs
Given the investment horizon of 90 days Astra Space is expected to under-perform the Planet Labs. In addition to that, Astra Space is 1.61 times more volatile than Planet Labs PBC. It trades about -0.04 of its total potential returns per unit of risk. Planet Labs PBC is currently generating about 0.05 per unit of volatility. If you would invest 246.00 in Planet Labs PBC on August 24, 2024 and sell it today you would earn a total of 102.50 from holding Planet Labs PBC or generate 41.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 64.8% |
| Values | Daily Returns |
Astra Space vs. Planet Labs PBC
Performance |
| Timeline |
| Astra Space |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Planet Labs PBC |
Astra Space and Planet Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Space and Planet Labs
The main advantage of trading using opposite Astra Space and Planet Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Space position performs unexpectedly, Planet Labs 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 Planet Labs will offset losses from the drop in Planet Labs' long position.| Astra Space vs. Virgin Galactic Holdings | Astra Space vs. Planet Labs PBC | Astra Space vs. Eve Holding | Astra Space vs. Redwire Corp |
| Planet Labs vs. Virgin Galactic Holdings | Planet Labs vs. Eve Holding | Planet Labs vs. Redwire Corp | Planet Labs 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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