Correlation Between Satellogic Warrant and Veltex

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

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

Diversification Opportunities for Satellogic Warrant and Veltex

-0.31

Correlation Coefficient

Satellogic Warrant  Veltex

Very good diversification

The 3 months correlation between Satellogic and Veltex is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Satellogic Warrant and Veltex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veltex and Satellogic Warrant 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 Warrant are associated (or correlated) with Veltex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veltex has no effect on the direction of Satellogic Warrant i.e., Satellogic Warrant and Veltex go up and down completely randomly.

Pair Corralation between Satellogic Warrant and Veltex

Assuming the 90 days horizon Satellogic Warrant is expected to generate 11.4 times more return on investment than Veltex. However, Satellogic Warrant is 11.4 times more volatile than Veltex. It trades about 0.14 of its potential returns per unit of risk. Veltex is currently generating about 0.02 per unit of risk. If you would invest  44.00  in Satellogic Warrant on October 4, 2024 and sell it today you would lose (4.00) from holding Satellogic Warrant or give up 9.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.69%
Values	Daily Returns

Satellogic Warrant  vs.  Veltex

Satellogic Warrant

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Satellogic Warrant are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, Satellogic Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Veltex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veltex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Veltex is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Satellogic Warrant and Veltex

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

The idea behind Satellogic Warrant and Veltex 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.