Correlation Between Satellogic Warrant and Lantronix

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

By analyzing existing cross correlation between Satellogic Warrant and Lantronix, you can compare the effects of market volatilities on Satellogic Warrant and Lantronix 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 Warrant with a short position of Lantronix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satellogic Warrant and Lantronix.

Diversification Opportunities for Satellogic Warrant and Lantronix

-0.36

Correlation Coefficient

Satellogic Warrant  Lantronix

Very good diversification

The 3 months correlation between Satellogic and Lantronix is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Satellogic Warrant and Lantronix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantronix and Satellogic Warrant 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 Warrant are associated (or correlated) with Lantronix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lantronix has no effect on the direction of Satellogic Warrant i.e., Satellogic Warrant and Lantronix go up and down completely randomly.

Pair Corralation between Satellogic Warrant and Lantronix

Assuming the 90 days horizon Satellogic Warrant is expected to generate 6.96 times more return on investment than Lantronix. However, Satellogic Warrant is 6.96 times more volatile than Lantronix. It trades about 0.21 of its potential returns per unit of risk. Lantronix is currently generating about -0.02 per unit of risk. If you would invest  3.70  in Satellogic Warrant on September 2, 2024 and sell it today you would earn a total of  4.80  from holding Satellogic Warrant or generate 129.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	54.69%
Values	Daily Returns

Satellogic Warrant  vs.  Lantronix

Satellogic Warrant

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Satellogic Warrant are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, Satellogic Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Lantronix

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Satellogic Warrant and Lantronix

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

The idea behind Satellogic Warrant and Lantronix 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 Stocks Directory module to find actively traded stocks across global markets.