Correlation Between AST SpaceMobile and Silver Lake

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

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

Diversification Opportunities for AST SpaceMobile and Silver Lake

-0.91

Correlation Coefficient

AST SpaceMobile  Silver Lake

Pay attention - limited upside

The 3 months correlation between AST and Silver is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding AST SpaceMobile and Silver Lake Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Lake Resources and AST SpaceMobile 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 AST SpaceMobile are associated (or correlated) with Silver Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Lake Resources has no effect on the direction of AST SpaceMobile i.e., AST SpaceMobile and Silver Lake go up and down completely randomly.

Pair Corralation between AST SpaceMobile and Silver Lake

Assuming the 90 days horizon AST SpaceMobile is expected to under-perform the Silver Lake. In addition to that, AST SpaceMobile is 2.46 times more volatile than Silver Lake Resources. It trades about -0.07 of its total potential returns per unit of risk. Silver Lake Resources is currently generating about 0.23 per unit of volatility. If you would invest  83.00  in Silver Lake Resources on February 2, 2024 and sell it today you would earn a total of  11.00  from holding Silver Lake Resources or generate 13.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

AST SpaceMobile  vs.  Silver Lake Resources

AST SpaceMobile

Risk-Adjusted Performance

0 of 100

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 conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Silver Lake Resources

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Lake Resources are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Silver Lake reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AST SpaceMobile and Silver Lake

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

The idea behind AST SpaceMobile and Silver Lake Resources 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.