Correlation Between General Dynamics and Momentus
Can any of the company-specific risk be diversified away by investing in both General Dynamics and Momentus 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 General Dynamics and Momentus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Dynamics and Momentus, you can compare the effects of market volatilities on General Dynamics and Momentus 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 General Dynamics with a short position of Momentus. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Dynamics and Momentus.
Diversification Opportunities for General Dynamics and Momentus
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between General and Momentus is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding General Dynamics and Momentus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Momentus and General Dynamics 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 General Dynamics are associated (or correlated) with Momentus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Momentus has no effect on the direction of General Dynamics i.e., General Dynamics and Momentus go up and down completely randomly.
Pair Corralation between General Dynamics and Momentus
Allowing for the 90-day total investment horizon General Dynamics is expected to generate 158.98 times less return on investment than Momentus. But when comparing it to its historical volatility, General Dynamics is 25.93 times less risky than Momentus. It trades about 0.02 of its potential returns per unit of risk. Momentus is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.89 in Momentus on November 9, 2024 and sell it today you would earn a total of 4.04 from holding Momentus or generate 453.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.88% |
| Values | Daily Returns |
General Dynamics vs. Momentus
Performance |
| Timeline |
| General Dynamics |
| Momentus |
General Dynamics and Momentus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Dynamics and Momentus
The main advantage of trading using opposite General Dynamics and Momentus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Dynamics position performs unexpectedly, Momentus 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 Momentus will offset losses from the drop in Momentus' long position.| General Dynamics vs. Lockheed Martin | General Dynamics vs. Raytheon Technologies Corp | General Dynamics vs. L3Harris Technologies | General Dynamics vs. Huntington Ingalls Industries |
| Momentus vs. Microvast Holdings | Momentus vs. Momentus | Momentus vs. Faraday Future Intelligent | Momentus vs. Xos Equity Warrants |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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