Correlation Between Rocket Lab and Astra Space
Can any of the company-specific risk be diversified away by investing in both Rocket Lab and Astra Space 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 Rocket Lab and Astra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocket Lab USA and Astra Space, you can compare the effects of market volatilities on Rocket Lab and Astra Space 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 Rocket Lab with a short position of Astra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocket Lab and Astra Space.
Diversification Opportunities for Rocket Lab and Astra Space
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rocket and Astra is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Rocket Lab USA and Astra Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Space and Rocket Lab 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 Rocket Lab USA are associated (or correlated) with Astra Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Space has no effect on the direction of Rocket Lab i.e., Rocket Lab and Astra Space go up and down completely randomly.
Pair Corralation between Rocket Lab and Astra Space
If you would invest 1,091 in Rocket Lab USA on August 24, 2024 and sell it today you would earn a total of 1,150 from holding Rocket Lab USA or generate 105.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Rocket Lab USA vs. Astra Space
Performance |
| Timeline |
| Rocket Lab USA |
| Astra Space |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rocket Lab and Astra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocket Lab and Astra Space
The main advantage of trading using opposite Rocket Lab and Astra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocket Lab position performs unexpectedly, Astra Space 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 Astra Space will offset losses from the drop in Astra Space's long position.| Rocket Lab vs. Redwire Corp | Rocket Lab vs. Momentus | Rocket Lab vs. Planet Labs PBC | Rocket Lab vs. Virgin Galactic Holdings |
| Astra Space vs. Virgin Galactic Holdings | Astra Space vs. Planet Labs PBC | Astra Space vs. Eve Holding | Astra Space vs. Redwire Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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