Correlation Between Planet Labs and Terran Orbital
Can any of the company-specific risk be diversified away by investing in both Planet Labs 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 Planet Labs and Terran Orbital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Labs PBC and Terran Orbital Corp, you can compare the effects of market volatilities on Planet Labs 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 Planet Labs with a short position of Terran Orbital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Labs and Terran Orbital.
Diversification Opportunities for Planet Labs and Terran Orbital
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Planet and Terran is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Planet Labs PBC 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 Planet Labs 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 Planet Labs PBC 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 Planet Labs i.e., Planet Labs and Terran Orbital go up and down completely randomly.
Pair Corralation between Planet Labs and Terran Orbital
Allowing for the 90-day total investment horizon Planet Labs PBC is expected to generate 0.73 times more return on investment than Terran Orbital. However, Planet Labs PBC is 1.37 times less risky than Terran Orbital. It trades about 0.08 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 219.00 in Planet Labs PBC on August 27, 2024 and sell it today you would earn a total of 132.00 from holding Planet Labs PBC or generate 60.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.43% |
| Values | Daily Returns |
Planet Labs PBC vs. Terran Orbital Corp
Performance |
| Timeline |
| Planet Labs PBC |
| Terran Orbital Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Planet Labs and Terran Orbital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Labs and Terran Orbital
The main advantage of trading using opposite Planet Labs and Terran Orbital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Labs 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.| Planet Labs vs. The Boeing | Planet Labs vs. Curtiss Wright | Planet Labs vs. Ehang Holdings | Planet Labs vs. General Dynamics |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |