Correlation Between Astra Space and Rocket Lab
Can any of the company-specific risk be diversified away by investing in both Astra Space and Rocket Lab 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 Rocket Lab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra Space and Rocket Lab USA, you can compare the effects of market volatilities on Astra Space and Rocket Lab 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 Rocket Lab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Space and Rocket Lab.
Diversification Opportunities for Astra Space and Rocket Lab
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Astra and Rocket is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Astra Space and Rocket Lab USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocket Lab USA 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 Rocket Lab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocket Lab USA has no effect on the direction of Astra Space i.e., Astra Space and Rocket Lab go up and down completely randomly.
Pair Corralation between Astra Space and Rocket Lab
If you would invest 1,091 in Rocket Lab USA on August 24, 2024 and sell it today you would earn a total of 1,150 from holding Rocket Lab USA or generate 105.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Astra Space vs. Rocket Lab USA
Performance |
| Timeline |
| Astra Space |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Rocket Lab USA |
Astra Space and Rocket Lab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Space and Rocket Lab
The main advantage of trading using opposite Astra Space and Rocket Lab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Space position performs unexpectedly, Rocket Lab 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 Rocket Lab will offset losses from the drop in Rocket Lab'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 |
| Rocket Lab vs. Redwire Corp | Rocket Lab vs. Momentus | Rocket Lab vs. Planet Labs PBC | Rocket Lab vs. Virgin Galactic Holdings |
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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