Correlation Between ABM Industries and Astra Space

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Can any of the company-specific risk be diversified away by investing in both ABM Industries 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 ABM Industries and Astra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABM Industries and Astra Space, you can compare the effects of market volatilities on ABM Industries 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 ABM Industries with a short position of Astra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABM Industries and Astra Space.

Diversification Opportunities for ABM Industries and Astra Space

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between ABM Industries and Astra is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding ABM Industries and Astra Space Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Space and ABM Industries 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 ABM Industries 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 ABM Industries i.e., ABM Industries and Astra Space go up and down completely randomly.

Pair Corralation between ABM Industries and Astra Space

Considering the 90-day investment horizon ABM Industries is expected to generate 0.36 times more return on investment than Astra Space. However, ABM Industries is 2.81 times less risky than Astra Space. It trades about 0.02 of its potential returns per unit of risk. Astra Space is currently generating about -0.06 per unit of risk. If you would invest  3,604  in ABM Industries on June 27, 2022 and sell it today you would earn a total of  222.00  from holding ABM Industries or generate 6.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.4%
ValuesDaily Returns

ABM Industries  vs.  Astra Space Inc

 Performance (%) 
       Timeline  
ABM Industries 
ABM Industries Performance
0 of 100
Over the last 90 days ABM Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest abnormal performance, the Stock's fundamental drivers remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

ABM Industries Price Channel

Astra Space 
Astra Performance
0 of 100
Over the last 90 days Astra Space has generated negative risk-adjusted returns adding no value to investors with long positions. Even with sluggish performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in October 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Astra Price Channel

ABM Industries and Astra Space Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ABM Industries and Astra Space

The main advantage of trading using opposite ABM Industries and Astra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABM Industries 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.
ABM Industries vs. The Travelers Companies
The idea behind ABM Industries and Astra Space pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Astra Space vs. Sigma Lithium 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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