Correlation Between Momentus and Sidus Space

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

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

Diversification Opportunities for Momentus and Sidus Space

0.8

Correlation Coefficient

Momentus  Sidus Space

Very poor diversification

The 3 months correlation between Momentus and Sidus is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Momentus and Sidus Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidus Space 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 Sidus Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidus Space has no effect on the direction of Momentus i.e., Momentus and Sidus Space go up and down completely randomly.

Pair Corralation between Momentus and Sidus Space

Given the investment horizon of 90 days Momentus is expected to under-perform the Sidus Space. In addition to that, Momentus is 1.01 times more volatile than Sidus Space. It trades about -0.26 of its total potential returns per unit of risk. Sidus Space is currently generating about -0.2 per unit of volatility. If you would invest  511.00  in Sidus Space on December 30, 2024 and sell it today you would lose (361.00) from holding Sidus Space or give up 70.65% of portfolio value over 90 days.

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

Momentus  vs.  Sidus Space

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.

Sidus Space

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sidus Space has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental 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.

Pair Trading with Momentus and Sidus Space

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

The idea behind Momentus and Sidus 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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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.