Correlation Between Satellogic and Cepton

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

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

Diversification Opportunities for Satellogic and Cepton

-0.46

Correlation Coefficient

Satellogic  Cepton

Very good diversification

The 3 months correlation between Satellogic and Cepton is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Satellogic V and Cepton Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cepton Inc and Satellogic 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 Satellogic V are associated (or correlated) with Cepton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cepton Inc has no effect on the direction of Satellogic i.e., Satellogic and Cepton go up and down completely randomly.

Pair Corralation between Satellogic and Cepton

Given the investment horizon of 90 days Satellogic V is expected to generate 0.84 times more return on investment than Cepton. However, Satellogic V is 1.2 times less risky than Cepton. It trades about 0.26 of its potential returns per unit of risk. Cepton Inc is currently generating about 0.04 per unit of risk. If you would invest  109.00  in Satellogic V on September 18, 2024 and sell it today you would earn a total of  293.00  from holding Satellogic V or generate 268.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Satellogic V  vs.  Cepton Inc

Satellogic V

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Satellogic V are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Satellogic disclosed solid returns over the last few months and may actually be approaching a breakup point.

Cepton Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cepton Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Cepton showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Satellogic and Cepton

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

The idea behind Satellogic V and Cepton Inc 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.