Correlation Between Momentus and Eve Holding
Can any of the company-specific risk be diversified away by investing in both Momentus and Eve Holding 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 Momentus and Eve Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Momentus and Eve Holding, you can compare the effects of market volatilities on Momentus and Eve Holding 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 Momentus with a short position of Eve Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Momentus and Eve Holding.
Diversification Opportunities for Momentus and Eve Holding
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Momentus and Eve is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Momentus and Eve Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eve Holding and Momentus 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 Momentus are associated (or correlated) with Eve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eve Holding has no effect on the direction of Momentus i.e., Momentus and Eve Holding go up and down completely randomly.
Pair Corralation between Momentus and Eve Holding
Given the investment horizon of 90 days Momentus is expected to generate 13.55 times more return on investment than Eve Holding. However, Momentus is 13.55 times more volatile than Eve Holding. It trades about 0.15 of its potential returns per unit of risk. Eve Holding is currently generating about 0.29 per unit of risk. If you would invest 64.00 in Momentus on July 12, 2024 and sell it today you would earn a total of 42.00 from holding Momentus or generate 65.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Momentus vs. Eve Holding
Performance |
Timeline |
Momentus |
Eve Holding |
Momentus and Eve Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Momentus and Eve Holding
The main advantage of trading using opposite Momentus and Eve Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Momentus position performs unexpectedly, Eve Holding 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 Eve Holding will offset losses from the drop in Eve Holding's long position.Momentus vs. Terran Orbital Corp | Momentus vs. Planet Labs PBC | Momentus vs. Rocket Lab USA | Momentus vs. Redwire Corp |
Eve Holding vs. Lilium NV | Eve Holding vs. Archer Aviation | Eve Holding vs. Ehang Holdings | Eve Holding vs. Vertical Aerospace |
Check out your portfolio center.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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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