Correlation Between AST SpaceMobile and Verizon Communications

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both AST SpaceMobile and Verizon Communications 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 Verizon Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AST SpaceMobile and Verizon Communications, you can compare the effects of market volatilities on AST SpaceMobile and Verizon Communications 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 Verizon Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AST SpaceMobile and Verizon Communications.

Diversification Opportunities for AST SpaceMobile and Verizon Communications

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between AST and Verizon is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding AST SpaceMobile and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications 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 Verizon Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of AST SpaceMobile i.e., AST SpaceMobile and Verizon Communications go up and down completely randomly.

Pair Corralation between AST SpaceMobile and Verizon Communications

Assuming the 90 days horizon AST SpaceMobile is expected to under-perform the Verizon Communications. In addition to that, AST SpaceMobile is 7.17 times more volatile than Verizon Communications. It trades about -0.05 of its total potential returns per unit of risk. Verizon Communications is currently generating about -0.02 per unit of volatility. If you would invest  4,319  in Verizon Communications on September 12, 2024 and sell it today you would lose (89.00) from holding Verizon Communications or give up 2.06% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy20.63%
ValuesDaily Returns

AST SpaceMobile  vs.  Verizon Communications

 Performance 
       Timeline  
AST SpaceMobile 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Verizon Communications 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Verizon Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Verizon Communications is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AST SpaceMobile and Verizon Communications Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AST SpaceMobile and Verizon Communications

The main advantage of trading using opposite AST SpaceMobile and Verizon Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AST SpaceMobile position performs unexpectedly, Verizon Communications 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 Verizon Communications will offset losses from the drop in Verizon Communications' long position.
The idea behind AST SpaceMobile and Verizon Communications 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope