Correlation Between Satellogic and CPI Aerostructures

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Can any of the company-specific risk be diversified away by investing in both Satellogic and CPI Aerostructures 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 and CPI Aerostructures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Satellogic V and CPI Aerostructures, you can compare the effects of market volatilities on Satellogic and CPI Aerostructures 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 with a short position of CPI Aerostructures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satellogic and CPI Aerostructures.

Diversification Opportunities for Satellogic and CPI Aerostructures

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Satellogic and CPI is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Satellogic V and CPI Aerostructures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPI Aerostructures and Satellogic 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 V are associated (or correlated) with CPI Aerostructures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPI Aerostructures has no effect on the direction of Satellogic i.e., Satellogic and CPI Aerostructures go up and down completely randomly.

Pair Corralation between Satellogic and CPI Aerostructures

Given the investment horizon of 90 days Satellogic V is expected to generate 2.26 times more return on investment than CPI Aerostructures. However, Satellogic is 2.26 times more volatile than CPI Aerostructures. It trades about 0.37 of its potential returns per unit of risk. CPI Aerostructures is currently generating about 0.13 per unit of risk. If you would invest  96.00  in Satellogic V on September 4, 2024 and sell it today you would earn a total of  100.00  from holding Satellogic V or generate 104.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Satellogic V  vs.  CPI Aerostructures

 Performance 
       Timeline  
Satellogic V 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Satellogic V are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Satellogic disclosed solid returns over the last few months and may actually be approaching a breakup point.
CPI Aerostructures 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in CPI Aerostructures are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, CPI Aerostructures unveiled solid returns over the last few months and may actually be approaching a breakup point.

Satellogic and CPI Aerostructures Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Satellogic and CPI Aerostructures

The main advantage of trading using opposite Satellogic and CPI Aerostructures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satellogic position performs unexpectedly, CPI Aerostructures 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 CPI Aerostructures will offset losses from the drop in CPI Aerostructures' long position.
The idea behind Satellogic V and CPI Aerostructures 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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