Correlation Between AST SpaceMobile and Cable One

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

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

Diversification Opportunities for AST SpaceMobile and Cable One

0.59

Correlation Coefficient

AST SpaceMobile  Cable One

Very weak diversification

The 3 months correlation between AST and Cable is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding AST SpaceMobile and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One 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 Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of AST SpaceMobile i.e., AST SpaceMobile and Cable One go up and down completely randomly.

Pair Corralation between AST SpaceMobile and Cable One

Assuming the 90 days horizon AST SpaceMobile is expected to under-perform the Cable One. In addition to that, AST SpaceMobile is 3.24 times more volatile than Cable One. It trades about -0.05 of its total potential returns per unit of risk. Cable One is currently generating about 0.13 per unit of volatility. If you would invest  32,263  in Cable One on September 12, 2024 and sell it today you would earn a total of  7,299  from holding Cable One or generate 22.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	20.63%
Values	Daily Returns

AST SpaceMobile  vs.  Cable One

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Cable One

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cable One are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental drivers, Cable One displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AST SpaceMobile and Cable One

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

The idea behind AST SpaceMobile and Cable One 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.