Correlation Between Bluebird Bio and Astra Space

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

Diversification Opportunities for Bluebird Bio and Astra Space

-0.58
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Bluebird and Astra is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bluebird Bio and Astra Space Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Space and Bluebird Bio 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 Bluebird Bio 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 Bluebird Bio i.e., Bluebird Bio and Astra Space go up and down completely randomly.

Pair Corralation between Bluebird Bio and Astra Space

Given the investment horizon of 90 days Bluebird Bio is expected to generate 1.36 times more return on investment than Astra Space. However, Bluebird Bio is 1.36 times more volatile than Astra Space. It trades about 0.04 of its potential returns per unit of risk. Astra Space is currently generating about -0.15 per unit of risk. If you would invest  575.00  in Bluebird Bio on July 1, 2022 and sell it today you would earn a total of  2.00  from holding Bluebird Bio or generate 0.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Bluebird Bio  vs.  Astra Space Inc

 Performance (%) 
       Timeline  
Bluebird Bio 
Bluebird Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bluebird Bio are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bluebird Bio exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bluebird 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 conflicting 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

Bluebird Bio and Astra Space Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bluebird Bio and Astra Space

The main advantage of trading using opposite Bluebird Bio and Astra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluebird Bio 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.
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The idea behind Bluebird Bio 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.
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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