Correlation Between Momentus and Draganfly

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

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

Diversification Opportunities for Momentus and Draganfly

0.82

Correlation Coefficient

Momentus  Draganfly

Very poor diversification

The 3 months correlation between Momentus and Draganfly is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Momentus and Draganfly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Draganfly and Momentus 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 Momentus are associated (or correlated) with Draganfly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Draganfly has no effect on the direction of Momentus i.e., Momentus and Draganfly go up and down completely randomly.

Pair Corralation between Momentus and Draganfly

Given the investment horizon of 90 days Momentus is expected to under-perform the Draganfly. In addition to that, Momentus is 1.01 times more volatile than Draganfly. It trades about -0.26 of its total potential returns per unit of risk. Draganfly is currently generating about -0.07 per unit of volatility. If you would invest  445.00  in Draganfly on December 30, 2024 and sell it today you would lose (187.00) from holding Draganfly or give up 42.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Momentus  vs.  Draganfly

Momentus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Momentus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Draganfly

Risk-Adjusted Performance

Very Weak

Over the last 90 days Draganfly has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Momentus and Draganfly

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

The idea behind Momentus and Draganfly 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 CEOs Directory module to screen CEOs from public companies around the world.