Correlation Between AST SpaceMobile and Rigetti Computing

Can any of the company-specific risk be diversified away by investing in both AST SpaceMobile and Rigetti Computing 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 AST SpaceMobile and Rigetti Computing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AST SpaceMobile and Rigetti Computing Warrants, you can compare the effects of market volatilities on AST SpaceMobile and Rigetti Computing 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 AST SpaceMobile with a short position of Rigetti Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of AST SpaceMobile and Rigetti Computing.

Diversification Opportunities for AST SpaceMobile and Rigetti Computing

0.32

Correlation Coefficient

AST SpaceMobile  Rigetti Computing

Weak diversification

The 3 months correlation between AST and Rigetti is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding AST SpaceMobile and Rigetti Computing Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigetti Computing and AST SpaceMobile 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 AST SpaceMobile are associated (or correlated) with Rigetti Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rigetti Computing has no effect on the direction of AST SpaceMobile i.e., AST SpaceMobile and Rigetti Computing go up and down completely randomly.

Pair Corralation between AST SpaceMobile and Rigetti Computing

Assuming the 90 days horizon AST SpaceMobile is expected to under-perform the Rigetti Computing. But the stock apears to be less risky and, when comparing its historical volatility, AST SpaceMobile is 1.81 times less risky than Rigetti Computing. The stock trades about -0.07 of its potential returns per unit of risk. The Rigetti Computing Warrants is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Rigetti Computing Warrants on August 31, 2024 and sell it today you would earn a total of  84.00  from holding Rigetti Computing Warrants or generate 646.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	31.75%
Values	Daily Returns

AST SpaceMobile  vs.  Rigetti Computing Warrants

AST SpaceMobile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AST SpaceMobile has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Rigetti Computing

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rigetti Computing Warrants are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, Rigetti Computing showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AST SpaceMobile and Rigetti Computing

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

The idea behind AST SpaceMobile and Rigetti Computing Warrants 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.