Correlation Between Astra Space and Planet Labs

Can any of the company-specific risk be diversified away by investing in both Astra Space and Planet Labs 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 Astra Space and Planet Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astra Space and Planet Labs PBC, you can compare the effects of market volatilities on Astra Space and Planet Labs 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 Astra Space with a short position of Planet Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Space and Planet Labs.

Diversification Opportunities for Astra Space and Planet Labs

0.0

Correlation Coefficient

Astra Space  Planet Labs

Pay attention - limited upside

The 3 months correlation between Astra and Planet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Astra Space and Planet Labs PBC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Labs PBC and Astra Space 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 Astra Space are associated (or correlated) with Planet Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Labs PBC has no effect on the direction of Astra Space i.e., Astra Space and Planet Labs go up and down completely randomly.

Pair Corralation between Astra Space and Planet Labs

If you would invest  393.00  in Planet Labs PBC on November 28, 2024 and sell it today you would earn a total of  46.00  from holding Planet Labs PBC or generate 11.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Astra Space  vs.  Planet Labs PBC

Astra Space

Risk-Adjusted Performance

Very Weak

Over the last 90 days Astra Space has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Astra Space is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Planet Labs PBC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Labs PBC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Planet Labs disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astra Space and Planet Labs

The main advantage of trading using opposite Astra Space and Planet Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Space position performs unexpectedly, Planet Labs 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 Planet Labs will offset losses from the drop in Planet Labs' long position.

The idea behind Astra Space and Planet Labs PBC 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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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.