Correlation Between Momentus and Redwire Corp
Can any of the company-specific risk be diversified away by investing in both Momentus and Redwire Corp 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 Redwire Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Momentus and Redwire Corp, you can compare the effects of market volatilities on Momentus and Redwire Corp 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 Redwire Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Momentus and Redwire Corp.
Diversification Opportunities for Momentus and Redwire Corp
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Momentus and Redwire is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Momentus and Redwire Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redwire 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 Redwire Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redwire Corp has no effect on the direction of Momentus i.e., Momentus and Redwire Corp go up and down completely randomly.
Pair Corralation between Momentus and Redwire Corp
Given the investment horizon of 90 days Momentus is expected to generate 1.6 times less return on investment than Redwire Corp. In addition to that, Momentus is 1.19 times more volatile than Redwire Corp. It trades about 0.18 of its total potential returns per unit of risk. Redwire Corp is currently generating about 0.35 per unit of volatility. If you would invest 919.00 in Redwire Corp on August 28, 2024 and sell it today you would earn a total of 458.00 from holding Redwire Corp or generate 49.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Momentus vs. Redwire Corp
Performance |
| Timeline |
| Momentus |
| Redwire Corp |
Momentus and Redwire Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Momentus and Redwire Corp
The main advantage of trading using opposite Momentus and Redwire Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Momentus position performs unexpectedly, Redwire Corp 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 Redwire Corp will offset losses from the drop in Redwire Corp's long position.| Momentus vs. Planet Labs PBC | Momentus vs. Rocket Lab USA | Momentus vs. Redwire Corp | Momentus vs. Virgin Galactic Holdings |
| Redwire Corp vs. Sidus Space | Redwire Corp vs. Rocket Lab USA | Redwire Corp vs. Momentus | Redwire Corp vs. Planet Labs PBC |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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