Correlation Between AST SpaceMobile and Orange SA

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

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

Diversification Opportunities for AST SpaceMobile and Orange SA

-0.75

Correlation Coefficient

AST SpaceMobile  Orange SA

Pay attention - limited upside

The 3 months correlation between AST and Orange is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding AST SpaceMobile and Orange SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange SA ADR 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 Orange SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange SA ADR has no effect on the direction of AST SpaceMobile i.e., AST SpaceMobile and Orange SA go up and down completely randomly.

Pair Corralation between AST SpaceMobile and Orange SA

Assuming the 90 days horizon AST SpaceMobile is expected to generate 17.16 times more return on investment than Orange SA. However, AST SpaceMobile is 17.16 times more volatile than Orange SA ADR. It trades about 0.13 of its potential returns per unit of risk. Orange SA ADR is currently generating about -0.02 per unit of risk. If you would invest  118.00  in AST SpaceMobile on September 4, 2024 and sell it today you would earn a total of  1,231  from holding AST SpaceMobile or generate 1043.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	82.11%
Values	Daily Returns

AST SpaceMobile  vs.  Orange SA ADR

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.

Orange SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orange SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with AST SpaceMobile and Orange SA

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

The idea behind AST SpaceMobile and Orange SA ADR 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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.