Correlation Between Momentus and AeroVironment
Can any of the company-specific risk be diversified away by investing in both Momentus and AeroVironment 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 AeroVironment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Momentus and AeroVironment, you can compare the effects of market volatilities on Momentus and AeroVironment 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 AeroVironment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Momentus and AeroVironment.
Diversification Opportunities for Momentus and AeroVironment
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Momentus and AeroVironment is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Momentus and AeroVironment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AeroVironment 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 AeroVironment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AeroVironment has no effect on the direction of Momentus i.e., Momentus and AeroVironment go up and down completely randomly.
Pair Corralation between Momentus and AeroVironment
Assuming the 90 days horizon Momentus is expected to generate 3.31 times more return on investment than AeroVironment. However, Momentus is 3.31 times more volatile than AeroVironment. It trades about 0.13 of its potential returns per unit of risk. AeroVironment is currently generating about -0.17 per unit of risk. If you would invest 1.19 in Momentus on September 2, 2024 and sell it today you would earn a total of 0.21 from holding Momentus or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Momentus vs. AeroVironment
Performance |
| Timeline |
| Momentus |
| AeroVironment |
Momentus and AeroVironment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Momentus and AeroVironment
The main advantage of trading using opposite Momentus and AeroVironment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Momentus position performs unexpectedly, AeroVironment 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 AeroVironment will offset losses from the drop in AeroVironment's long position.| Momentus vs. Heico | Momentus vs. Mercury Systems | Momentus vs. AeroVironment | Momentus vs. Howmet Aerospace |
| AeroVironment vs. Archer Aviation | AeroVironment vs. Rocket Lab USA | AeroVironment vs. Lilium NV | AeroVironment vs. HEICO |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |