Correlation Between Satellogic Warrant and Northrop Grumman
Can any of the company-specific risk be diversified away by investing in both Satellogic Warrant and Northrop Grumman 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 Satellogic Warrant and Northrop Grumman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Satellogic Warrant and Northrop Grumman, you can compare the effects of market volatilities on Satellogic Warrant and Northrop Grumman 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 Satellogic Warrant with a short position of Northrop Grumman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satellogic Warrant and Northrop Grumman.
Diversification Opportunities for Satellogic Warrant and Northrop Grumman
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Satellogic and Northrop is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Satellogic Warrant and Northrop Grumman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northrop Grumman and Satellogic Warrant 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 Satellogic Warrant are associated (or correlated) with Northrop Grumman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northrop Grumman has no effect on the direction of Satellogic Warrant i.e., Satellogic Warrant and Northrop Grumman go up and down completely randomly.
Pair Corralation between Satellogic Warrant and Northrop Grumman
Assuming the 90 days horizon Satellogic Warrant is expected to generate 27.06 times more return on investment than Northrop Grumman. However, Satellogic Warrant is 27.06 times more volatile than Northrop Grumman. It trades about 0.41 of its potential returns per unit of risk. Northrop Grumman is currently generating about -0.1 per unit of risk. If you would invest 4.00 in Satellogic Warrant on August 27, 2024 and sell it today you would earn a total of 3.50 from holding Satellogic Warrant or generate 87.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 28.57% |
| Values | Daily Returns |
Satellogic Warrant vs. Northrop Grumman
Performance |
| Timeline |
| Satellogic Warrant |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Northrop Grumman |
Satellogic Warrant and Northrop Grumman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Satellogic Warrant and Northrop Grumman
The main advantage of trading using opposite Satellogic Warrant and Northrop Grumman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satellogic Warrant position performs unexpectedly, Northrop Grumman 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 Northrop Grumman will offset losses from the drop in Northrop Grumman's long position.| Satellogic Warrant vs. Satellogic V | Satellogic Warrant vs. Revelation Biosciences | Satellogic Warrant vs. Cepton Inc |
| Northrop Grumman vs. Redwire Corp | Northrop Grumman vs. Sidus Space | Northrop Grumman vs. Rocket Lab USA | Northrop Grumman vs. Momentus |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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