Correlation Between Satellogic Warrant and EMCORE

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

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

Diversification Opportunities for Satellogic Warrant and EMCORE

-0.4

Correlation Coefficient

Satellogic Warrant  EMCORE

Very good diversification

The 3 months correlation between Satellogic and EMCORE is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Satellogic Warrant and EMCORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCORE 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 EMCORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCORE has no effect on the direction of Satellogic Warrant i.e., Satellogic Warrant and EMCORE go up and down completely randomly.

Pair Corralation between Satellogic Warrant and EMCORE

Assuming the 90 days horizon Satellogic Warrant is expected to under-perform the EMCORE. In addition to that, Satellogic Warrant is 2.39 times more volatile than EMCORE. It trades about -0.21 of its total potential returns per unit of risk. EMCORE is currently generating about -0.19 per unit of volatility. If you would invest  400.00  in EMCORE on February 8, 2024 and sell it today you would lose (113.00) from holding EMCORE or give up 28.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	41.46%
Values	Daily Returns

Satellogic Warrant  vs.  EMCORE

Satellogic Warrant

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Satellogic Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

EMCORE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EMCORE has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Satellogic Warrant and EMCORE

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

The idea behind Satellogic Warrant and EMCORE 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.