Correlation Between Aerovironment and Astra Space

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

Diversification Opportunities for Aerovironment and Astra Space

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Aerovironment and Astra is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aerovironment and Astra Space Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Space and Aerovironment 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 Aerovironment 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 Aerovironment i.e., Aerovironment and Astra Space go up and down completely randomly.

Pair Corralation between Aerovironment and Astra Space

Given the investment horizon of 90 days Aerovironment is expected to generate 0.87 times more return on investment than Astra Space. However, Aerovironment is 1.15 times less risky than Astra Space. It trades about -0.12 of its potential returns per unit of risk. Astra Space is currently generating about -0.36 per unit of risk. If you would invest  10,095  in Aerovironment on June 26, 2022 and sell it today you would lose (1,230)  from holding Aerovironment or give up 12.18% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Aerovironment  vs.  Astra Space Inc

 Performance (%) 
       Timeline  
Aerovironment 
Aerovironment Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Aerovironment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly sluggish basic indicators, Aerovironment may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Aerovironment 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

Aerovironment and Astra Space Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aerovironment and Astra Space

The main advantage of trading using opposite Aerovironment and Astra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerovironment 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.
Aerovironment vs. Sigma Lithium Corp
The idea behind Aerovironment 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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

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