Correlation Between Momentus and Terran Orbital
Can any of the company-specific risk be diversified away by investing in both Momentus and Terran Orbital 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 Momentus and Terran Orbital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Momentus and Terran Orbital Corp, you can compare the effects of market volatilities on Momentus and Terran Orbital 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 Momentus with a short position of Terran Orbital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Momentus and Terran Orbital.
Diversification Opportunities for Momentus and Terran Orbital
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Momentus and Terran is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Momentus and Terran Orbital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terran Orbital Corp and Momentus 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 Momentus are associated (or correlated) with Terran Orbital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terran Orbital Corp has no effect on the direction of Momentus i.e., Momentus and Terran Orbital go up and down completely randomly.
Pair Corralation between Momentus and Terran Orbital
Given the investment horizon of 90 days Momentus is expected to generate 2.41 times more return on investment than Terran Orbital. However, Momentus is 2.41 times more volatile than Terran Orbital Corp. It trades about 0.04 of its potential returns per unit of risk. Terran Orbital Corp is currently generating about -0.1 per unit of risk. If you would invest 76.00 in Momentus on August 27, 2024 and sell it today you would lose (20.00) from holding Momentus or give up 26.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.43% |
| Values | Daily Returns |
Momentus vs. Terran Orbital Corp
Performance |
| Timeline |
| Momentus |
| Terran Orbital Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Momentus and Terran Orbital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Momentus and Terran Orbital
The main advantage of trading using opposite Momentus and Terran Orbital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Momentus position performs unexpectedly, Terran Orbital 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 Terran Orbital will offset losses from the drop in Terran Orbital's long position.| Momentus vs. Planet Labs PBC | Momentus vs. Rocket Lab USA | Momentus vs. Redwire Corp | Momentus vs. Virgin Galactic Holdings |
| Terran Orbital vs. Intuitive Machines | Terran Orbital vs. Sidus Space | Terran Orbital vs. Redwire Corp | Terran Orbital vs. Rocket Lab USA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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