Correlation Between Xos Equity and AST SpaceMobile

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

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

Diversification Opportunities for Xos Equity and AST SpaceMobile

0.0

Correlation Coefficient

Xos Equity  AST SpaceMobile

Pay attention - limited upside

The 3 months correlation between Xos and AST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xos Equity Warrants and AST SpaceMobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AST SpaceMobile and Xos Equity 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 Xos Equity Warrants are associated (or correlated) with AST SpaceMobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AST SpaceMobile has no effect on the direction of Xos Equity i.e., Xos Equity and AST SpaceMobile go up and down completely randomly.

Pair Corralation between Xos Equity and AST SpaceMobile

If you would invest  0.50  in Xos Equity Warrants on December 26, 2024 and sell it today you would earn a total of  0.59  from holding Xos Equity Warrants or generate 118.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Xos Equity Warrants  vs.  AST SpaceMobile

Xos Equity Warrants

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xos Equity Warrants are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Xos Equity showed solid returns over the last few months and may actually be approaching a breakup point.

AST SpaceMobile

Risk-Adjusted Performance

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 fairly stable basic indicators, AST SpaceMobile is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Xos Equity and AST SpaceMobile

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

The idea behind Xos Equity Warrants and AST SpaceMobile 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.